SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 30, 1997
Willis Lease Finance Corporation
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-28774 68-0070656
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
180 Harbor Drive, Suite 200 94965-2846
Sausalito, CA (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 331-5281
<PAGE>
ITEM 5. Other Events.
A copy of Willis Lease Finance Corporation's (the "Company") press
release dated July 30, 1997, announcing the hiring of Donald A.
Nunemaker as Executive Vice President and Chief Administrative Officer,
is filed as an exhibit to this Current Report on Form 8-K.
Also attached is a copy of the Company's press release dated July 31,
1997, announcing its second quarter financial results, filed as an
exhibit to this Current Report on Form 8-K.
ITEM 7. Financial Statements, Proforma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 99.1 Press Release dated July 30, 1997.
Exhibit 99.2 Press Release dated July 31, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Willis Lease Finance Corporation
Dated: August 4, 1997 By /s/ Elliot M. Fischer
---------------------
Elliot M. Fischer
Chief Financial Officer and
Controller (Principal Financial and
Accounting Officer)
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EXHIBIT 99.1
[GRAPHIC OMITTED]
Willis Lease Finance Corporation
180 Harbor Drive, Suite 200
Sausalito, CA 94965
(415) 331-5281 Phone
(415) 331-6070 Fax
FOR RELEASE
Wednesday, July 30, 1997
Len Cereghino & Co. CLIENT: WILLIS LEASE FINANCE
CORPORATE INVESTOR RELATIONS CONTACT: Elliot M. Fischer
2605 Western Ave., Seattle, WA 98121 Chief Financial Officer
(206) 448-1996 (415) 331-5281
NEWS RELEASE
================================================================================
DONALD NUNEMAKER JOINS WILLIS LEASE FINANCE AS
EXECUTIVE VP AND CHIEF ADMINISTRATIVE OFFICER
San Francisco, CA - July 30, 1997 - Willis Lease Finance Corporation
(NASDAQ: WLFC) today announced the continued expansion of its management team
with the addition of Donald A. Nunemaker to fill the newly created position of
Chief Administrative Officer and Executive Vice President.
"With the rapid pace of growth we've generated over the past year, we
have come to the point where we need to broaden our management team," stated
Charles F. Willis, President and CEO. "Mr. Nunemaker's knowledge of management
controls and operational functions combined with his experience in equipment
finance and leasing will enhance our senior management team and help us
effectively manage our growth in assets and transactions going forward."
Mr. Nunemaker has been involved in the equipment leasing industry since
1973. Recently he was President and CEO of Lease Partners, Inc., a small ticket
vendor leasing company based in Burlingame, California, prior to its acquisition
by the Newcourt Credit Group. Mr. Nunemaker has served as Executive Vice
President of
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<PAGE>
Concord Asset Management, Inc., an aircraft and computer leasing
subsidiary of Concord Leasing, Inc., owned by the HSBC Group. He held various
positions during his thirteen years with Chase Manhattan Leasing Company,
including Senior Vice President & Division Executive. Mr. Nunemaker has an MBA
from Indiana University.
Willis Lease Finance Corporation provides operating leases of spare
commercial aircraft engines and spare parts to commercial airlines, aircraft
manufacturers and overhaul/repair facilities worldwide. The company also engages
in the purchase and resale of used and refurbished commercial aircraft engines
and airframe and engine components.
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NOTE: Transmitted on PR Newswire at 2:07 p.m. PDT July 30, 1997.
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EXHIBIT 99.2
[GRAPHIC OMITTED]
Willis Lease Finance Corporation
180 Harbor Drive, Suite 200
Sausalito, CA 94965
(415) 331-5281 Phone
(415) 331-6070 Fax
FOR RELEASE
Thursday, July 31, 1997
Len Cereghino & Co. CLIENT: WILLIS LEASE FINANCE
CORPORATE INVESTOR RELATIONS CONTACT: Elliot M. Fischer
2605 Western Ave., Seattle, WA 98121 Chief Financial Officer
(206) 448-1996 (415) 331-5281
NEWS RELEASE
================================================================================
WILLIS LEASE FINANCE REPORTS RECORD SECOND QUARTER RESULTS;
REVENUE AND PROFITS BOTH INCREASE 73%
SAUSALITO, CA - July 31,1997 -- Willis Lease Finance Corporation
(NASDAQ:WLFC), today reported record second quarter revenues and profits, which
both increased 73% over a year ago. The strong performance was due to growth in
each of its three business components: operating leases, spare parts sales and
equipment resale.
Second quarter revenues increased to $15.9 million compared to $9.2
million in the second quarter of 1996. Second quarter net income increased to
$1.3 million or $.23 per share compared to $731,000 or $.23 per share in the
like quarter a year ago. First quarter net income (excluding a $2.0 million or
$.36 per share extraordinary gain after tax) increased 21% to $1.0 million or
$.18 per share. Per share results are not comparable to prior periods due to the
2.3 million shares issued in WLFC's initial public offering in September 1996.
In the first half of 1997, revenues increased 58% to $25.4 million
compared to $16.1 million in the first half of 1996. Net income grew 46% to $2.3
million or $.41 per share (excluding a $2.0 million, or $.36 per share,
extraordinary gain after tax) compared to $1.6 million or $.50 per share in the
first half a year ago. Including the extraordinary gain, net income in the first
half of 1997 was $4.3 million or $.77 per share.
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<PAGE>
WLFC - 1997 Second Quarter Results
July 31, 1997
Page Two
Pretax income grew 69% in the second quarter of 1997 to $2.1 million
from $1.2 million in the year ago period. For the first half of 1997, pre-tax
income increased 40% to $3.8 million compared to $2.7 million in the first half
a year ago. Year-to-date, WLFC generated an annualized return on average assets
of 3.24% and an annualized return on average equity of 18.0%.
"With very strong load factors and record profitability, airlines
worldwide are creating a great deal of demand for spare engines and parts. As a
result, revenue from WASI, our spare parts subsidiary, more than tripled in the
second quarter and equipment resale revenue grew 65%," stated Charles F. Willis,
President. "Equipment and parts sales are an increasingly important part of our
sales mix, accounting for 63% of revenues year to date."
Spare parts sales increased 218% to $3.7 million and accounted
for 23% of 1997 second quarter revenues, up from $1.1 million or 13% of second
quarter revenues a year ago. WLFC more than doubled its spare parts inventories
to $6.9 million during the past twelve months to support the fast growth in this
segment of its operations. "Additionally, we have moved into our Arizona
facility and are in the process of dismantling our first aircraft. We've already
signed contracts for some of the parts from this plane and believe this
operation will benefit not only our spare parts business but also our efforts to
acquire assets to lease," stated Willis.
Revenue from equipment acquired for resale increased 65% to $7.6
million or 48% of revenues in the second quarter up from $4.6 million or 50% of
last year's second quarter revenues. Operating lease revenue, which accounted
for 28% of second quarter revenues, increased 31% to $4.4 million compared to
$3.4 million or 37% of total second quarter revenues a year ago.
"During the second quarter, we purchased six engines for $18.6 million
to add to our lease portfolio; and five of the engines are currently leased,"
said Elliot M. Fischer, Chief Financial Officer. "We continue to expand our
portfolio of spare aircraft engines and have increased the portfolio 47% in the
past twelve months." At June 30, 1997, Willis Lease Finance had 37 engines and
related equipment owned and/or leased, with an estimated appraised value of
$129.6 million. The equipment is on lease to 28 airlines operating in 14
countries.Margins in the operating lease portfolio (excluding gains or losses on
engine sales) were 35% in the second quarter and 37% in the first half of 1997,
compared to 42% in the second
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<PAGE>
WLFC - 1997 Second Quarter Results
July 31, 1997
Page Three
quarter and 35% in the first half a year ago. In the first quarter, Willis
repaid one of its term loans at a $3.5 million discount and funded the repayment
by signing a new term loan for $41.5 million. As a result of the refinancing,
the Company booked a first quarter after tax extraordinary gain of $2.0 million
or $.36 per share ($3.3 million pre-tax).
Margins at WASI improved to 34% in 1997's second quarter compared to
25% one year ago. In the first half, WASI margins were 37% compared to 43% for
the first half of 1996. Second quarter margins for equipment resale were 15% for
both 1997 and 1996. For the first half of 1997, margins for equipment resale
were 15% compared to 19% in the like period a year ago.
General and administrative expenses were $2.2 million or 14% of
revenues in the second quarter of 1997 compared to $1.2 million or 13% of second
quarter revenues a year ago. For the first six months of this year, G&A expenses
increased to $3.9 million or 15% of revenues compared to $2.1 million or 13% of
first half revenues in 1996. "Salaries and benefits and the expenses of being a
public company are the primary reasons for this increase," Fischer noted.
"Staffing levels grew to 30 employees from 23 employees a year ago."
The company's debt to equity ratio dropped to 2.99 to 1 from 10.53 to 1
a year ago due to the equity raised in the IPO. Assets totaled $156 million at
June 30, 1997, compared to $91 million a year ago and $125 million at December
31, 1996. Since the end of 1996, shareholder equity increased 19% to $27.6
million; tangible book value was $5.07 per share at June 30, 1997, compared to
$4.28 at the end of 1996.
Willis Lease Finance Corporation's primary businesses are the leasing
of spare replacement aircraft engines and spare parts and the strategic
acquisition and resale of aircraft engines to the worldwide commercial airline
aftermarket. The Company began its leasing operations in 1988 and established
WASI (Willis Aeronautical Services, Inc.) to conduct its spare parts resale
operation in October 1994. On Wednesday, July 30, the stock closed at $14.50 per
share.
Except for historical information contained herein, the matters discussed in
this release contain forward looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, the effect of changing
economic conditions, trends in the airline industry, changes in interest rates,
liability risks associated with providing engines, parts and services to
aircraft, the ability of the Company to successfully negotiate equipment
purchases and to re-market or re-lease engines in a timely manner, the ability
to control costs and expenses, and other risks detailed in the Company's
Registration Statement and continuing reports filed with the Securities and
Exchange Commission.
(more)
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WLFC - 1997 Second Quarter Results
July 31, 1997
Page Four
<CAPTION>
FINANCIAL HIGHLIGHTS Second Quarter Ended Six Months Ended
(in thousands except per share) (unaudited) June 30, June 30,
1997 1996 1997 1996
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Revenues:
Operating lease revenue $ 4,429 $ 3,381 $ 8,544 $ 6,835
Gain on sale of leased engines $ 0 0 397 0
Spare parts sales $ 3,656 1,148 5,878 2,434
Sale of equipment acquired for resale $ 7,600 4,613 10,148 6,824
Interest and other income $ 201 47 453 47
--------- ---------- ---------- ---------
TOTAL REVENUE $ 15,886 $ 9,189 $ 25,420 $ 16,140
Expenses:
Interest expense $ 1,673 $ 1,124 $ 3,138 $ 2,271
Depreciation expense 979 678 1,854 1,778
Residual share 181 152 371 374
Cost of spare parts sales 2,403 861 3,707 1,386
Cost of equipment acquired for resale 6,385 3,933 8,638 5,533
General & administrative 2,157 1,191 3,943 2,101
--------- ---------- ---------- ---------
TOTAL EXPENSES $ 13,778 $ 7,939 $ 21,651 $ 13,443
Income before income taxes, minority interest and
extraordinary item $ 2,108 $ 1,250 $ 3,769 $ 2,697
Income taxes (842) (512) (1,487) (1,095)
---------- ----------- ----------- ----------
Income before minority interest and extraordinary item 1,266 738 2,282 1,602
Less: minority interest in net income of subsidiary -- (7) -- (34)
--------- ----------- ---------- ----------
Income before extraordinary item 1,266 731 2,282 1,568
Extraordinary item less applicable income taxes -- -- 2,008 --
--------- ---------- ---------- ---------
Net income $ 1,266 $ 731 $ 4,290 $ 1,568
========= ========== ========== =========
Earnings per common share:
Income before extraordinary item $ 0.23 $ 0.23 $ 0.41 $ 0.50
Extraordinary item -- -- 0.36 --
--------- ---------- ---------- ---------
Net income $ 0.23 $ 0.23 $ 0.77 $ 0.50
========= ========== ========== =========
Weighted average number of shares outstanding 5,556 3,111 5,554 3,111
(more)
</TABLE>
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<TABLE>
WLFC - 1997 Second Quarter Results
July 31, 1997
Page Five
<CAPTION>
June 30, 1997 Dec. 31, 1996 June 30,1996
------------- ------------- ------------
<S> <C> <C> <C>
Cash and short term investments $ 14,884 $ 6,573 $ 624
Aircraft engines and engine leases,
net of accumulated depreciation $ 117,082 $ 96,092 $ 74,172
Spare parts inventory $ 6,860 $ 4,057 $ 3,048
Total receivables $ 4,315 $ 3,197 $ 1,447
Total assets $ 156,332 $ 124,933 $ 91,356
Total liabilities $ 128,733 $ 101,731 $ 85,119
Shareholders' equity $ 27,599 $ 23,202 $ 6,118
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NOTE: Transmitted on PR Newswire at 1:06 p.m. PDT, July 31, 1997.
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