FLY Leasing Reports First Quarter 2017 Financial Results

Donnerstag, 11.05.2017 13:06 von PR Newswire

PR Newswire

DUBLIN, May 11, 2017 /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 2017.

FLY Leasing Limited logo. (PRNewsFoto/FLY Leasing Limited)

Highlights

  • Net income of $5.1 million, $0.16 per share
  • Adjusted Net Income of $11.1 million, $0.34 per share
  • Repurchased $8.5 million in shares as of May 10
  • Committed to nearly $300 million in acquisitions
  • Repriced, extended and upsized Term Loan to $450 million

"FLY is moving from a year of very active aircraft sales to focusing on deploying our significant cash reserves," said Colm Barrington, CEO of FLY. "Following quarter end, we have committed to nearly $300 million of aircraft purchases. FLY has financial resources to acquire up to $2.5 billion of additional aircraft and to continue to repurchase our shares. We expect these future aircraft acquisitions to have a material positive impact on our earnings."

"FLY has repurchased $8.5 million in shares at a significant discount to net book value through May 10," added Barrington. "We have approximately $58 million remaining in our current share repurchase authorization."

"We repriced, extended and upsized our Term Loan to $450 million in April, which will save approximately $2 million in annual interest expense," added Barrington. "This transaction demonstrates FLY's continuing access to robust capital markets, and enhances its already strong financial position."

Financial Results

FLY is reporting net income for the first quarter of 2017 of $5.1 million, or $0.16 per diluted share.  This compares to net income of $7.1 million, or $0.21 per diluted share, for the same period in 2016.

Adjusted Net Income

Adjusted Net Income was $11.1 million for the first quarter of 2017 compared to $16.2 million in the same period in the previous year.  On a per share basis, Adjusted Net Income was $0.34 in the first quarter of 2017 compared to $0.47 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.

Share Repurchases

During the first quarter of 2017, 99,524 shares were repurchased at an average cost of $12.95 per share.  At March 31, 2017, approximately $65.4 million remained available under the share repurchase program.  Subsequent to quarter end, another 560,858 shares were repurchased at an average cost of $12.83.  These share prices are well below FLY's book value per share of $18.62 at March 31, 2017. As of May 10, 2017, approximately $58 million remained available under the share repurchase program.

Financial Position

At March 31, 2017, FLY's total assets were $3.4 billion, including an investment in flight equipment totaling $2.8 billion. Total cash at March 31, 2017 was $606.1 million, of which $536.9 million was unrestricted. 

Aircraft Portfolio

At March 31, 2017, FLY's 76 aircraft, as shown in the table below, were on lease to 42 airlines in 28 countries.  The table does not show the two B767 aircraft owned by a joint venture in which FLY has a 57% ownership.


Portfolio at

Mar 31,
2017

Dec 31,
2016

Airbus A319

9

9

Airbus A320

12

12

Airbus A321

3

3

Airbus A330

3

3

Airbus A340

2

2

Boeing 737

38

38

Boeing 757

3

3

Boeing 777

2

2

Boeing 787

4

4

    Total

76

76


At March 31, 2017, the average age of the portfolio was 6.4 years weighted by the net book value of each aircraft. The average remaining lease term was 6.6 years, also weighted by net book value. At March 31, 2017, FLY's leases were generating annualized rental revenue of approximately $325 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, May 11, 2017. Participants should dial +1-253-237-1145 (International) or 800-535-7056 (North America) and enter confirmation code 94532798 or ask an operator for the FLY Leasing earnings call. 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, including FLY's inability to achieve its portfolio growth expectations or its failure to achieve the benefits of such growth. 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
ir@flyleasing.com



FLY Leasing Limited

Consolidated Statements of Income

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Three months
ended
Mar. 31, 2017
(Unaudited)

Three months
ended
Mar. 31, 2016
(Unaudited)

Revenues



Operating lease rental revenue

$           79,321

$       74,633

End of lease revenue

1,239

3,206

Amortization of lease incentives

(1,775)

(2,773)

Amortization of lease premiums, discounts and other

(82)

(113)

        Operating lease revenue

78,703

74,953

Finance lease income

188

892

Gain on sale of aircraft

--

5,143

Equity earnings from unconsolidated subsidiary

125

133

Interest and other income

250

87

Total revenues

79,266

81,208

Expenses



Depreciation

32,051

28,839

Interest expense

31,833

30,834

Selling, general and administrative

8,292

8,269

(Gain) loss on ineffective and dedesignated derivatives

(51)

286

Debt modification and extinguishment costs

544

4,527

Maintenance and other costs

472

1,199

Total expenses

73,141

73,954

Net income before provision for income taxes

6,125

7,254

Provision for income taxes

1,073

154

Net income

$             5,052

$         7,100

Weighted average number of shares:



-  Basic

32,244,481

34,287,783

-  Diluted

32,301,322

34,288,608

Earnings per share (net income per common share):



-  Basic and diluted

$                0.16

$           0.21




FLY Leasing Limited

Consolidated Balance Sheets

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Mar. 31, 2017
(Unaudited)

Dec. 31, 2016
(Audited)

Assets



Cash and cash equivalents

$         536,877

$       517,964

Restricted cash and cash equivalents

69,200

94,123

Rent receivables

87

419

Investment in unconsolidated subsidiary

7,825

7,700

Investment in finance lease, net

14,774

15,095

Flight equipment held for operating lease, net

2,666,926

2,693,821

Maintenance right asset, net

101,969

101,969

Fair market value of derivative assets

2,223

1,905

Deferred tax asset, net

7,266

7,445

Other assets

5,543

6,568

Total assets

3,412,690

3,447,009

Liabilities



Accounts payable and accrued liabilities

26,905

13,786

Rentals received in advance

13,191

13,123

Payable to related parties

2,152

5,042

Security deposits

43,083

42,495

Maintenance payment liability

195,421

182,571

Unsecured borrowings, net

691,886

691,390

Secured borrowings, net

1,774,373

1,831,985

Fair market value of derivative liabilities

11,185

13,281

Deferred tax liability, net

20,942

19,847

Other liabilities

34,643

40,254

Total liabilities

2,813,781

2,853,774

Shareholders' equity



Common shares, $0.001 par value, 499,999,900 shares authorized; 32,156,916 and 32,256,440 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively

32

32

Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding

--

--

Additional paid in capital

535,626

536,922

Retained earnings

71,078

66,026

Accumulated other comprehensive loss, net

(7,827)

(9,745)

Total shareholders' equity

598,909

593,235

Total liabilities and shareholders' equity

$      3,412,690

$       3,447,009




FLY Leasing Limited

Consolidated Statements of Cash Flows

(DOLLARS IN THOUSANDS)



Three months
ended
Mar. 31, 2017
(Unaudited)


Three months
ended
Mar. 31, 2016
(Unaudited)

Cash Flows from Operating Activities




Net Income

$            5,052


$            7,100

Adjustments to reconcile net income to net cash flows provided by operating activities:




Equity in earnings from unconsolidated subsidiary

(125)


(133)

Finance lease income

(188)


(892)

Gain on sale of aircraft

--


(5,143)

Depreciation

32,051


28,839

Amortization of debt discounts and issuance costs

2,119


2,360

Amortization of lease incentives

1,775


2,773

Amortization of lease premiums, discounts and other

83


113

Amortization of GAAM acquisition fair value adjustments

475


672

Net loss on debt modification and extinguishment

532


3,679

Unrealized foreign exchange loss

219


1,001

Provision for deferred income taxes

1,058


94

(Gain) loss on derivative instruments

(181)


216

Security deposits and maintenance payment liability recognized into earnings

--


(400)

Security deposits and maintenance payment claims applied towards operating lease revenues

--


(805)

Cash receipts from maintenance rights

--


6,150

Changes in operating assets and liabilities:




Rent receivables

332


(751)

Other assets

1,004


(141)

Payable to related parties

(2,890)


(7,239)

Accounts payable, accrued and other liabilities

12,205


18,065

Net cash flows provided by operating activities

53,521


55,558

Cash Flows from Investing Activities




Rent received from finance lease

510


1,230

Proceeds from sale of aircraft, net

--


155,359

Payments for aircraft improvement

(5,157)


(3,034)

Payments for lessor maintenance obligations

(6,456)


(514)

Net cash flows (used in) provided by investing activities

(11,103)


153,041





Three months
ended
Mar. 31, 2017
(Unaudited)
 


Three months
ended
Mar. 31, 2016
(Unaudited)

Cash Flows from Financing Activities




Restricted cash and cash equivalents

24,923


76,058

Security deposits received

525


--

Maintenance payment liability receipts

16,341


17,968

Maintenance payment liability disbursements

(3,531)


(662)

Swap termination payments, net

--


(538)

Debt extinguishment costs

(12)


--

Debt issuance costs

--


(349)

Proceeds from secured borrowings

--


16,756

Repayment of secured borrowings

(60,496)


(239,645)

Shares repurchased

(1,291)


(25,191)

Net cash flows used in financing activities

(23,541)


(155,603)

Effect of exchange rate changes on cash and cash equivalents

36


279

Net increase in cash and cash equivalents

18,913


53,275

Cash and cash equivalents at beginning of period

517,964


275,998

Cash and cash equivalents at end of period

$     536,877


$      329,273

Supplemental Disclosure:




Cash paid during the period for:




Interest

$       17,515


$        16,573

Income taxes

158


18

Supplemental disclosure of noncash activities:




Other liabilities applied to maintenance payment liability and rent receivables

350


--

Noncash investing activities:




Aircraft improvement

--


2,338

Noncash activities in connection with sale of aircraft

--


27,432




FLY Leasing Limited

Reconciliation of Non-GAAP Measures

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Three months
ended
March 31, 2017
(Unaudited)

Three months
ended
March 31, 2016
(Unaudited)

Net income

$         5,052

$           7,100

Amortization of debt discounts and loan issue costs

2,119

2,360

Amortization of lease premiums, discounts and other

83

113

Amortization of fair value adjustments recorded in purchase accounting

475

672

Net loss on debt modification and extinguishment

544

4,527

Transaction fees and expenses

1,605

--

Unrealized foreign exchange loss

219

1,001

Deferred income taxes

1,058

94

(Gain) loss on ineffective, dedesignated and terminated derivatives

(51)

286

Adjusted Net Income

$       11,104

$         16,153

Average Shareholders' Equity

$     596,072

$       644,810

Adjusted Return on Equity

7.5%

10.0%




Weighted average diluted shares outstanding

32,301,322

34,288,608

Adjusted Net Income per diluted share

$           0.34

$             0.47

FLY defines Adjusted Net Income as net income plus or minus (i) non-cash amortization of debt discounts, loan issuance costs, lease premiums and discounts, and other items; (ii) adjustments related to the GAAM portfolio acquisition comprised primarily of amortization of fair value adjustments recorded in purchase accounting; (iii) net losses from debt modification and extinguishment; (iv) transaction fees and expenses; (v) unrealized foreign exchange losses; (vi) deferred income taxes; and (vii) 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 our core operating performance 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, Adjusted Net Income and Adjusted Return on Equity help us compare our performance to our competitors. These measures should be considered in addition to, and 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