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BUSINESS SEGMENTS | 9 Months Ended
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Sep. 30, 2021
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.
| ● | Tech Ops — comprised of MRO activities; and product sales of internally developed engineered solutions and other serviceable products.
The Asset Management Solutions segment provides short-term and long-term leasing solutions of aircraft and jet engines to passenger and cargo operators worldwide. Assets considered to be at or near the end of their useful lives, supplied by our leasing portfolio or acquisitions, are analyzed for return maximization to assess whether they will be traded as whole assets or disassembled and sold as individual spare parts and components. The Tech Ops 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 revenues consist 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. Periodically, the Company’s Tech Ops segment engages in the repair and sale of used serviceable materials through their ability to overhaul existing inventory. Gross profit is calculated by subtracting cost of sales from sales. 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 expense and income tax expense. Selected financial information for each segment for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30, | ​
​ | ​ | 2021 |  | 2020 | ​ | 2021 |  | 2020 |
Revenues | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​
Asset Management Solutions | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​
Aircraft | ​ | $ | 15,204 | ​ | $ | 20,979 | ​ | $ | 49,925 | ​ | $ | 45,819 | ​
Engine | ​ |  | 33,672 | ​ |  | 8,673 | ​ |  | 88,502 | ​ |  | 35,515 | ​
​ | ​ |  | 48,876 | ​ |  | 29,652 | ​ |  | 138,427 | ​ |  | 81,334 | ​
Tech Ops | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
MRO services | ​ |  | 21,683 | ​ |  | 26,516 | ​ |  | 78,116 | ​ |  | 74,193 | ​
Product sales | ​ |  | 2,739 | ​ |  | 897 | ​ |  | 7,111 | ​ |  | 4,029 | ​
​ | ​ |  | 24,422 | ​ |  | 27,413 | ​ |  | 85,227 | ​ |  | 78,222 | ​
Total | ​ | $ | 73,298 | ​ | $ | 57,065 | ​ | $ | 223,654 | ​ | $ | 159,556 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30, | ​
​ | ​ | 2021 | ​ | 2020 | ​ | 2021 | ​ | 2020 | ​
Gross profit | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
Asset Management Solutions | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
Aircraft | ​ | $ | 6,729 | ​ | $ | 14,374 | ​ | $ | 16,370 | ​ | $ | 9,110 | ​
Engine | ​ |  | 10,084 | ​ |  | 4,343 | ​ |  | 33,129 | ​ |  | 13,465 | ​
​ | ​ |  | 16,813 | ​ |  | 18,717 | ​ |  | 49,499 | ​ |  | 22,575 | ​
Tech Ops | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
MRO services | ​ |  | 6,407 | ​ |  | 7,686 | ​ |  | 22,481 | ​ |  | 16,823 | ​
Product sales | ​ |  | 1,412 | ​ |  | 102 | ​ |  | 3,225 | ​ |  | 265 | ​
​ | ​ |  | 7,819 | ​ |  | 7,788 | ​ |  | 25,706 | ​ |  | 17,088 | ​
Total | ​ | $ | 24,632 | ​ | $ | 26,505 | ​ | $ | 75,205 | ​ | $ | 39,663 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2021 | ​ | December 31, 2020 | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Management Solutions | ​ | $ | 325,750 | ​ | $ | 277,016 | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tech Ops | ​ | ​ | 113,528 | ​ | ​ | 108,622 | ​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ | ​ | 711 | ​ | ​ | 3,492 | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 439,989 | ​ | $ | 389,130 | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ The following table reconciles segment gross profit to net (loss) income for the three and nine months ended September 30, 2021 and 2020 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Nine Months Ended September 30, | ​
​ | ​ | 2021 |  | 2020 | ​ | 2021 |  | 2020 |
Segment gross profit | ​ | $ | 24,632 | ​ | $ | 26,505 | ​ | $ | 75,205 | ​ | $ | 39,663 | ​
Selling, general and administrative expenses | ​ |  | (22,803) | ​ |  | (13,377) | ​ |  | (53,079) | ​ |  | (40,614) | ​
Payroll support program proceeds | ​ |  | - | ​ |  | 6,347 | ​ |  | 14,768 | ​ |  | 12,693 | ​
Transaction costs | ​ |  | - | ​ |  | (219) | ​ |  | - | ​ |  | (434) | ​
Interest expense, net | ​ |  | (241) | ​ |  | (267) | ​ |  | (750) | ​ |  | (1,307) | ​
Other income, net | ​ |  | 9 | ​ |  | 206 | ​ |  | 258 | ​ |  | 358 | ​
Change in fair value of warrant liability | ​ | ​ | (2,104) | ​ | ​ | - | ​ | ​ | (2,735) | ​ | ​ | - | ​
Income tax expense | ​ |  | (1,129) | ​ |  | (4,476) | ​ |  | (8,737) | ​ |  | (2,519) | ​
Net (loss) income | ​ | $ | (1,636) | ​ | $ | 14,719 | ​ | $ | 24,930 | ​ | $ | 7,840 | ​
​ 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 and nine months ended September 30, 2021 and 2020, is as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Nine Months Ended September 30, |
​ | ​ | 2021 |  | 2020 |  | 2021 |  | 2020 |
Asset Management Solutions | ​ | $ | 959 | ​ | $ | 945 | ​ | $ | 2,942 | ​ | $ | 2,047 | ​
Tech Ops | ​ |  | 6,015 | ​ |  | 6 | ​ |  | 14,747 | ​ |  | 1,467 | ​
Total intersegment revenues | ​ | $ | 6,974 | ​ | $ | 951 | ​ | $ | 17,689 | ​ | $ | 3,514 | ​
​

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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