FLY Leasing Reports First Quarter 2015 Financial Results
DUBLIN, May 8, 2015 /PRNewswire/ -- FLY Leasing Limited (NYSE: FLY) ("FLY"), a global lessor of modern, fuel-efficient commercial jet aircraft, today announced its financial results for the first quarter of 2015.
First Quarter 2015 Highlights
- Net income of $17.3 million, $0.41 per share
- Increased total revenues by 34% to $122.5 million
- Invested $147 million in four aircraft
- Sold three aircraft for a $1.9 million gain over book value
- Re-priced Term Loan in April, saving $4 million in annual interest cost
- Declared Q1 dividend of $0.25 per share
"FLY has started 2015 with strong first quarter results," said Colm Barrington, FLY's CEO. "Our investments have grown our fleet to 128 aircraft, an increase of 11 aircraft from a year ago, driving a 34% increase in total quarterly revenues. We are targeting $750 million in aircraft acquisitions this year and have acquired and identified $475 million of aircraft to date. Meanwhile, we continue to opportunistically trade aircraft, selling three aircraft in the first quarter for a gain of $1.9 million over book value."
"Our net income of $17.3 million, or $0.41 per share, is a significant increase over the first quarter of last year, and is largely due to our growing fleet," added Barrington. "We also continue to return capital to shareholders, declaring our 30th consecutive quarterly dividend."
"We actively manage the company's capital structure, just as we actively manage our fleet, taking advantage of the favorable funding environment and our access to well-priced debt," said Barrington. "In April, we re-priced our Term Loan, which will reduce our interest cost by approximately $4 million annually."
"Globally the airline industry is on a strong trajectory, with air traffic growth and airline profits exceeding the levels of recent years," added Barrington. "These conditions benefit lessors, including FLY, by providing strong demand for leased aircraft with a resultant firming in lease rates and aircraft values."
Financial Results
FLY is reporting net income for the first quarter of 2015 of $17.3 million or $0.41 per diluted share. This compares to net income of $3.6 million or $0.07 per diluted share for the same period in 2014. The first quarter 2015 results include $21.9 million of end of lease revenue and a charge of approximately $4.0 million associated with termination of the Aircraft Acquisition Facility. End of lease revenue was $3.7 million in the first quarter of 2014.
Total revenues increased 34% to $122.5 million and include $120.1 million of operating lease revenue and $1.9 million in gains from the sale of three aircraft. Operating lease revenue increased $30.5 million over the same period in the preceding year.
Adjusted Net Income
Adjusted Net Income was $26.6 million for the first quarter of 2015 compared to $9.8 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $0.64 in the first quarter of 2015 compared to $0.24 for the same period in the previous year.
A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.
Dividends and Share Repurchases
On April 15, 2015, FLY declared a dividend of $0.25 per share in respect of the first quarter of 2015. This dividend will be paid on May 20, 2015 to shareholders of record on April 30, 2015. FLY has now paid dividends totaling $7.62 since its listing in 2007.
On May 6, 2015, FLY's board of directors approved a $30 million share repurchase program expiring in May 2016 to replace the previous program. Under this program, FLY may make share repurchases from time to time in the open market or in privately negotiated transactions. The timing of the repurchases under this program will depend upon a variety of factors, including market conditions, and the program may be suspended or discontinued at any time.
Financial Position
At March 31, 2015, FLY's total assets were $4.1 billion, including flight equipment with a net book value of $3.7 billion. Cash and cash equivalents at March 31, 2015 totaled $416.6 million, of which $280.3 million was unrestricted. In addition, FLY had 17 unencumbered aircraft with an aggregate net book value of $632.4 million at March 31, 2015.
Aircraft Portfolio
At March 31, 2015, FLY's 128 aircraft, as shown in the table below, were on lease to 63 airlines in 35 countries.
| Portfolio at |
Mar 31, |
Dec 31, 2014 |
| Airbus A319 |
18 |
18 |
| Airbus A320 |
29 |
27 |
| Airbus A321 |
5 |
3 |
| Airbus A330 |
4 |
4 |
| Airbus A340 |
3 |
3 |
| Boeing 737 |
54 |
57 |
| Boeing 747 |
1 |
1 |
| Boeing 757 |
11 |
11 |
| Boeing 767 |
1 |
1 |
| Boeing 777 |
1 |
1 |
| Boeing 787 |
1 |
1 |
| Total |
128 |
127 |
| Note: The table does not include two B767 aircraft owned by a joint venture in which FLY has a 57% interest. |
At March 31, 2015, the average age of the portfolio was 8.1 years weighted by the net book value of each aircraft. The average remaining lease term was 5.1 years, also weighted by net book value. At March 31, 2015, FLY's leases were generating annualized rental revenues of approximately $424.1 million.
Conference Call and Webcast
FLY's senior management will host a conference call and webcast to discuss these results at 10:00 a.m. U.S. Eastern Time on Friday, May 8, 2015. Participants should dial +1-253-237-1145 (International) or 800-535-7056 (North America) and enter confirmation code 21363329 or ask an operator for the FLY Leasing earnings call. A replay will be available shortly after the live call. To access the replay, please dial +1-404-537-3406 (International) or 855-859-2056 (North America) and enter confirmation code 21363329. The replay recording will be available for ten days. A live webcast of the conference call will be also available in the investor relations section of FLY's website at www.flyleasing.com. An archived webcast will be available on FLY's website for one year.
About FLY
FLY is a global aircraft leasing company with a fleet of modern, high-demand, and fuel efficient commercial jet aircraft. FLY acquires and leases its aircraft under multi-year operating lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM LP, a worldwide leader in aircraft lease management and financing. For more information about FLY, please visit our website at www.flyleasing.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for FLY's future business and financial performance. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. Further information on the factors and risks that may affect FLY's business is included in filings FLY makes with the Securities and Exchange Commission from time to time, including its Annual Report on Form 20-F and its reports on Form 6-K. FLY expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.
Contact:
Matt Dallas
FLY Leasing Limited
+1 203-769-5916
[email protected]
| FLY Leasing Limited |
||
| Consolidated Statements of Income |
||
| (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) |
||
| Three month |
Three month |
|
| Revenues |
||
| Operating lease rental revenue |
$ 103,148 |
$ 90,536 |
| End of lease revenue |
21,936 |
3,679 |
| Amortization of lease incentives |
(4,036) |
(3,388) |
| Amortization of lease premiums/discounts and other |
(945) |
(1,200) |
| Operating lease revenue |
120,103 |
89,627 |
| Gain on sale of aircraft |
1,897 |
- |
| Equity earnings from unconsolidated subsidiary |
340 |
1,382 |
| Interest and other income |
206 |
310 |
| Total revenues |
122,546 |
91,319 |
| Expenses |
||
| Depreciation |
50,074 |
40,403 |
| Interest expense |
39,297 |
34,625 |
| Debt modification and extinguishment costs |
4,050 |
15 |
| Selling, general and administrative |
8,264 |
9,615 |
| Ineffective and dedesignated derivatives |
(264) |
(65) |
| Maintenance and other costs |
1,586 |
2,410 |
| Total expenses |
103,007 |
87,003 |
| Net income before provision for income taxes |
19,539 |
4,316 |
| Provision for income taxes |
2,273 |
753 |
| Net income |
$ 17,266 |
$ 3,563 |
| Weighted average number of shares: |
||
| - Basic |
41,432,998 |
41,333,938 |
| - Diluted |
41,545,287 |
41,393,731 |
| Earnings per share (net income per common share): |
||
| - Basic and diluted |
$ 0.41 |
$ 0.07 |
| Dividends declared and paid per share |
$ 0.25 |
$ 0.25 |
| FLY Leasing Limited |
||
| Consolidated Balance Sheets |
||
| (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) |
||
| Mar. 31, |
Dec. 31, |
|
| Assets |
||
| Cash and cash equivalents |
$ 280,285 |
$ 337,560 |
| Restricted cash and cash equivalents |
136,336 |
139,139 |
| Rent receivables |
11,002 |
4,887 |
| Investment in unconsolidated subsidiary |
4,342 |
4,002 |
| Flight equipment held for operating lease, net |
3,678,090 |
3,705,407 |
| Fair market value of derivative assets |
131 |
2,067 |
| Other assets, net |
24,247 |
31,608 |
| Total assets |
4,134,433 |
4,224,670 |
| Liabilities |
||
| Accounts payable and accrued liabilities |
33,185 |
18,431 |
| Rentals received in advance |
18,697 |
19,751 |
| Payable to related parties |
2,704 |
2,772 |
| Security deposits |
59,668 |
64,058 |
| Maintenance payment liability |
244,385 |
254,514 |
| Unsecured borrowings, net |
689,866 |
689,452 |
| Secured borrowings, net |
2,240,721 |
2,335,328 |
| Fair market value of derivative liabilities |
28,087 |
23,311 |
| Deferred tax liability, net |
17,614 |
16,289 |
| Other liabilities |
39,820 |
41,890 |
| Total liabilities |
3,374,747 |
3,465,796 |
| Shareholders' equity |
||
| Common shares, $0.001 par value, 499,999,900 shares authorized; 41,432,998 shares issued and outstanding at March 31, 2015 and December 31, 2014 |
41 |
41 |
| Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding |
− |
− |
| Additional paid in capital |
658,674 |
658,522 |
| Retained earnings |
124,119 |
117,402 |
| Accumulated other comprehensive loss, net |
(23,148) |
(17,091) |
| Total shareholders' equity |
759,686 |
758,874 |
| Total liabilities and shareholders' equity |
$ 4,134,433 |
$ 4,224,670 |
| FLY Leasing Limited |
|||||||||||
| Consolidated Statements of Cash Flows |
|||||||||||
| (DOLLARS IN THOUSANDS) |
|||||||||||
| Three month |
Three month |
||||||||||
| Cash Flows from Operating Activities |
|||||||||||
| Net Income |
$ |
17,266 |
$ |
3,563 |
|||||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: |
|||||||||||
| Equity in earnings from unconsolidated subsidiary |
(340) |
(1,382) |
|||||||||
| Gain on sale of aircraft |
(1,897) |
- |
|||||||||
| Depreciation |
50,074 |
40,403 |
|||||||||
| Amortization of debt discounts and issuance costs |
3,110 |
3,142 |
|||||||||
| Amortization of lease incentives |
4,036 |
3,388 |
|||||||||
| Amortization of lease discounts/premiums and other items |
719 |
632 |
|||||||||
| Amortization of fair market value adjustments associated with the GAAM acquisition |
1,237 |
1,929 |
|||||||||
| Debt modification and extinguishment costs |
4,050 |
- |
|||||||||
| Share-based compensation |
152 |
(56) |
|||||||||
| Unrealized foreign exchange loss on cash balances |
330 |
(33) |
|||||||||
| Unrealized foreign exchange gain on Euro denominated secured borrowing |
(2,000) |
- |
|||||||||
| Provision for deferred income taxes |
2,026 |
634 |
|||||||||
| Unrealized gain on derivative instruments |
(264) |
(65) |
|||||||||
| Security deposits and maintenance payment liability recognized into earnings |
(21,936) |
(3,268) |
|||||||||
| Changes in operating assets and liabilities: |
|||||||||||
| Rent receivables |
(1,685) |
(2,079) |
|||||||||
| Other assets |
2,375 |
(568) |
|||||||||
| Payable to related parties |
(3,632) |
(1,742) |
|||||||||
| Accounts payable and accrued liabilities |
11,794 |
5,536 |
|||||||||
| Rentals received in advance |
(1,054) |
(773) |
|||||||||
| Other liabilities |
(2,606) |
4,470 |
|||||||||
| Net cash flows provided by operating activities |
61,755 |
53,731 |
|||||||||
| Cash Flows from Investing Activities |
|||||||||||
| Purchase of flight equipment |
(137,113) |
(81,837) |
|||||||||
| Proceeds from sale of aircraft, net |
126,503 |
- |
|||||||||
| Payment for aircraft improvement |
(4,403) |
- |
|||||||||
| Payments for maintenance |
(7,730) |
(6,791) |
|||||||||
| Net cash flows used in investing activities |
(22,743) |
(88,628) |
|||||||||
| Three month |
Three month |
||||||||||
| Cash Flows from Financing Activities |
|||||||||||
| Restricted cash and cash equivalents |
2,803 |
41,188 |
|||||||||
| Security deposits received |
845 |
2,100 |
|||||||||
| Security deposits returned |
(2,868) |
- |
|||||||||
| Maintenance payment liability receipts |
17,514 |
33,172 |
|||||||||
| Maintenance payment liability disbursements |
(8,332) |
(4,195) |
|||||||||
| Proceeds from termination of interest rate swaps |
23 |
- |
|||||||||
| Debt issuance costs |
(343) |
(197) |
|||||||||
| Proceeds from secured borrowings |
67,802 |
- |
|||||||||
| Repayment of secured borrowings |
(162,852) |
(44,162) |
|||||||||
| Dividends |
(10,358) |
(10,327) |
|||||||||
| Dividend equivalents |
(191) |
(676) |
|||||||||
| Net cash flows(used in) provided by financing activities |
(95,957) |
16,903 |
|||||||||
| Effect of exchange rate changes on cash and cash equivalents |
(330) |
33 |
|||||||||
| Net decrease in cash |
(57,275) |
(17,961) |
|||||||||
| Cash at beginning of period |
337,560 |
404,472 |
|||||||||
| Cash at end of period |
$ |
280,285 |
$ |
386,511 |
|||||||
| Supplemental Disclosure: |
|||||||||||
| Cash paid during the period for: |
|||||||||||
| Interest |
$ |
24,059 |
$ |
24,725 |
|||||||
| Income taxes |
110 |
137 |
|||||||||
| Supplemental disclosure of noncash activities: |
|||||||||||
| Aircraft improvement |
2,510 |
621 |
|||||||||
| Security deposits applied to maintenance payment liability and rent receivables |
2,542 |
358 |
|||||||||
| Maintenance payment liability applied to rent receivables |
2,108 |
- |
|||||||||
| Other liabilities applied to maintenance payment liability and rent receivables |
240 |
979 |
|||||||||
| Noncash activities in connection with purchase of aircraft: |
|||||||||||
| Rent receivable applied |
626 |
- |
|||||||||
| Security deposits assumed |
1,743 |
590 |
|||||||||
| Lease incentive obligation |
6,099 |
- |
|||||||||
| Noncash activities in connection with sale of aircraft: |
|||||||||||
| Rent receivable applied |
695 |
- |
|||||||||
| Refundable deposits applied |
2,250 |
- |
|||||||||
| Security deposits and maintenance reserves transferred |
6,116 |
- |
|||||||||
| FLY Leasing Limited |
||
| Reconciliation of Non-GAAP Measures |
||
| (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) |
||
| Three month |
Three month |
|
| Net income |
$ 17,266 |
$ 3,563 |
| Amortization of debt discounts and loan issuance costs |
3,110 |
3,142 |
| Amortization of lease discounts/premiums and other items |
719 |
632 |
| Amortization of GAAM acquisition date fair market value adjustments |
1,237 |
1,929 |
| Debt modification and extinguishment costs |
4,050 |
15 |
| Share-based compensation |
152 |
(56) |
| Unrealized foreign exchange gain |
(1,670) |
(33) |
| Deferred income taxes |
2,026 |
634 |
| Ineffective, dedesignated and terminated derivatives |
(264) |
(65) |
| Adjusted Net Income |
$ 26,626 |
$ 9,761 |
| Average Shareholders' Equity |
$ 759,280 |
$ 744,698 |
| Adjusted Return on Equity |
14.0% |
5.2% |
| Weighted average diluted shares outstanding |
41,545,287 |
41,393,731 |
| Adjusted Net Income per diluted share |
$0.64 |
$0.24 |
FLY defines Adjusted Net Income as net income plus or minus (i) non-cash amortization of debt discounts, loan issuance costs, lease discounts/premiums and other items; (ii) adjustments related to the GAAM portfolio acquisition comprised primarily of amortization of fair value adjustments recorded in purchase accounting; (iii) debt modification and extinguishment costs; (iv) non-cash share-based compensation; (v) unrealized foreign exchange gain/loss; (vi) deferred income taxes; and (vii) the ineffective portion and other comprehensive items associated with terminated cash flow hedges. Adjusted Return on Equity is calculated by dividing Adjusted Net Income over the average shareholders' equity for the period presented. For periods of less than one year, Adjusted Net Income for the relevant period is annualized in calculating Adjusted Return on Equity.
We use Adjusted Net Income and Adjusted Return on Equity to assess our core operating performance on a consistent basis from period to period. In addition, Adjusted Net Income and Adjusted Return on Equity help us compare our performance to our competitors. These measures should be considered in addition to, not as a substitute for net income or other financial measures determined in accordance with Accounting Principles Generally Accepted in the United States. FLY's definitions may be different than those used by other companies.
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SOURCE FLY Leasing Limited
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