AerSale Corp (NASDAQ:ASLE), a provider of aftermarket aircraft parts and services with annual revenue of $344.75 million and a market capitalization of $325.65 million, has reported receiving approximately $34.6 million as an advance insurance payment. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 7.21, indicating its ability to meet short-term obligations.
This follows an incident in April 2024 when a fire destroyed one of the company's secondary parts warehouses in Roswell, New Mexico, containing used service material (USM) inventory.
The destroyed inventory, with a cost basis of $6.0 million, was covered by insurance that had a $100 million limit with a $10,000 deductible. AerSale had filed a claim for approximately $67 million, representing the replacement value of the lost inventory. As the claim had not been settled by September 30, 2024, the company recorded an impairment and a non-trade receivable of $6.0 million each in its condensed consolidated balance sheets.
On December 9, 2024, AerSale reached an agreement with its insurance carriers for a good faith payment of $37.0 million against the claim. The final valuation of the claim is still under review, and the company is in discussions with the carriers to provide additional information needed to receive the outstanding balance. AerSale believes it is probable that it will recover additional amounts up to the claim amount, but the timing and the final amount depend on the insurance carriers' final assessment.
This financial update is based on a press release statement and reflects the latest developments in AerSale's ongoing insurance claim process. The company's stock is traded on The Nasdaq Stock Market LLC under the ticker ASLE.
InvestingPro analysis suggests the stock is currently trading below its Fair Value, with 11 additional ProTips available to subscribers covering crucial aspects like cash flow, profitability, and growth metrics.
Access the comprehensive Pro Research Report, part of InvestingPro's coverage of 1,400+ US equities, for deeper insights into AerSale's financial health and market position.
In other recent news, AerSale Inc. reported mixed results for its third quarter of 2024. The company's overall revenue fell to $82.7 million from $92.5 million in the same quarter last year, but it saw a significant rise in adjusted EBITDA, which surged to $8.2 million from $1.9 million. This increase was attributed to improved leasing revenue and strong demand in the USM and MRO segments.
Despite the decline in total revenue, AerSale's core business revenue, excluding flight equipment sales, increased by 26%. The company also reported a robust liquidity position, ending the quarter with $103.5 million.
AerSale is advancing with expansion projects, including the Miami component and Aerostructures facilities, and the Millington MRO facility. Four engines were added to the lease pool, contributing to leasing revenue stability. The company is actively pursuing sales for AerAware and AerSafe products ahead of the 2026 regulatory deadline.
AerSale anticipates growth driven by strategic initiatives and market conditions, and is focused on monetizing its 757 P2F aircraft and feedstock inventory.
Despite these developments, AerSale faces challenges, including a decline in revenue from flight equipment sales and competitive pressures in acquiring feedstock. However, the company remains optimistic about capitalizing on the influx of older flight equipment as OEM production ramps up. These are some of the recent developments for AerSale.
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