FLY Leasing Reports Third Quarter 2016 Financial Results

DUBLIN, Nov. 17, 2016 /PRNewswire/ -- FLY Leasing Limited (NYSE: FLY) ("FLY"), a global leader in aircraft leasing, today announced its financial results for the third quarter of 2016.

Highlights

• Net Income of $22.9 million, or $0.70 per share
• Adjusted Net Income of $17.3 million, or $0.53 per share
• Acquired seven aircraft at a cost of $467 million
• Sold three older aircraft for a gain of $4.1 million, a 19% premium to net book value
• Repurchased 894,011 shares at an average price of $11.34 per share

"FLY is continuing to execute its program to enhance shareholder value," said Colm Barrington, FLY's CEO. "We are selling older aircraft at gains to book value and investing the proceeds in newer models, mainly in attractive sale and leaseback transactions, as well as repurchasing our shares. These initiatives are producing solid operating results, with net income of 70 cents per share for the quarter." 

"In the quarter we sold three aircraft with an average age of 15 years, generating a gain of $4.1 million, a 19% premium to net book value," added Barrington. "Meanwhile, we invested $467 million in seven aircraft with an average age of about two-and-one-half years. The impact of these and earlier transactions on our portfolio metrics was significant, reducing our fleet age to 6.2 years and increasing our average lease term to 6.7 years.  FLY continues to have ample resources to fund its growth strategy with more than $1 billion of unrestricted cash, available debt capacity and unencumbered assets providing more than $2 billion of purchasing power."

"FLY continued to repurchase shares, acquiring nearly 900,000 shares in the quarter," said Barrington. "Since September 2015, we have repurchased 22% of our shares at a significant discount to net book value, which helped increase FLY's book value to nearly $20.00 per share."

"Our clients continue to perform strongly," added Barrington. "2016 will be the most profitable year for the world's airlines due to strong passenger growth, high load factors and low fuel prices. This is good news for the aircraft leasing industry, as are recent decisions by the manufacturers to reduce aircraft supply by cutting the production rates of certain aircraft types. We continue to see a strong market for aircraft sales and opportunities for aircraft purchases."

Financial Results

FLY is reporting net income of $22.9 million, or $0.70 per share, for the third quarter of 2016. This compares to a restated net income of $27.5 million, or $0.66 per share, for the same period in 2015.

Net income for the nine months ended September 30, 2016 was $34.7 million, or $1.03 per share. The restated net income was $3.7 million, or $0.07 per share, for the same period in 2015.

Adjusted Net Income

Adjusted Net Income was $17.3 million for the third quarter of 2016, compared to $41.1 million for the same period in the previous year.  On a per share basis, Adjusted Net Income was $0.53 in the third quarter of 2016, compared to $0.99 for the third quarter of 2015.  For the nine months ended September 30, 2016, Adjusted Net Income was $48.7 million, or $1.45 per share, compared to $83.7 million, or $2.01 per share for the same period in 2015.

Share Repurchases

During the first nine months of 2016, FLY repurchased 3.2 million shares for approximately $38 million. At September 30, 2016, approximately $69 million remained available under the current $75 million share repurchase program. At September 30, 2016, there were 32.5 million shares outstanding.

Financial Position

At September 30, 2016, FLY's total assets were $3.5 billion, including investment in flight equipment totaling $3.1 billion. 

Cash and cash equivalents at September 30, 2016 totaled $386.4 million, of which $324.5 million was unrestricted.  The book value per share at September 30, 2016 was $19.99. 

Aircraft Portfolio

At September 30, 2016, FLY's 81 aircraft were on lease to 43 airlines in 28 countries. The table does not show aircraft that were held for sale, which were one and thirteen at September 30, 2016 and December 31, 2015, respectively, or the two Boeing 767 aircraft owned by a joint venture in which FLY has a 57% interest.

At September 30, 2016, the average age of the portfolio weighted by net book value of each aircraft, was 6.2 years. The average remaining lease term was 6.7 years, also weighted by net book value. At September 30, 2016, FLY's portfolio was generating annualized rental revenue of approximately $347 million.

Conference Call and Webcast

FLY's senior management will host a conference call and webcast to discuss these results at 9:00 a.m. U.S. Eastern Time on Thursday, November 17, 2016.  Participants should call +1-253-237-1145 (International) or 800-535-7056 (North America) and enter confirmation code 95203082.  A live webcast with slide presentation will be available on the Events page in the Investor Relations section of FLY's website at www.flyleasing.com. A webcast replay will be available on the company'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 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 defines Adjusted Net Income as net income plus or minus (i) non-cash impairment charges; (ii) non-cash amortization of debt discounts, loan issuance costs, lease premiums and discounts, and other items; (iii) adjustments related to the GAAM portfolio acquisition comprised primarily of amortization of fair value adjustments recorded in purchase accounting; (iv) net losses from debt modification and extinguishment; (v) non-cash share-based compensation; (vi) legal and accounting expenses related to the restatement of our financial statements and related litigation (vii) unrealized foreign exchange gains and losses; (viii) deferred income taxes; and (ix) the ineffective portion and charges associated with cash flow hedges.  The adjustments included within Adjusted Net Income are primarily non-cash items, one-time or non-recurring items that are not expected to continue in the future, and certain other items that we consider unrelated to the ongoing performance of our operations.  Adjusted return on equity is calculated by dividing Adjusted Net Income by the average shareholders' equity for the periods presented.  For periods of less than one year, the resulting return is annualized.

FLY uses Adjusted Net Income and Adjusted Return on Equity, in addition to GAAP net income and earnings per share, to assess the ongoing performance of our operations on a consistent basis from period to period.  Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash, one-time or non-recurring items that are not expected to continue in the future, and certain other items that are not indicative of our overall operating trends.  In addition, we believe that Adjusted Net Income and Adjusted Return on Equity help us and our investors and potential investors compare our performance to our competitors.  These measures should be considered in addition to, not as a substitute for net income or other financial measure determined in accordance with Accounting Principles Generally Accepted in the United States.  FLY's definitions may be different than those used by other companies, limiting their usefulness as comparative measures.

Logo - http://photos.prnewswire.com/prnh/20130709/SF44539LOGO

SOURCE FLY Leasing Limited

Related Links

http://www.flyleasing.com