DUBLIN, July 28, 2016 /PRNewswire/ -- FLY Leasing Limited
(NYSE: FLY) ("FLY"), a global lessor of modern, fuel-efficient
commercial jet aircraft, today announced its financial results for
the second quarter of 2016.
Second Quarter 2016 Highlights
- Net income of $4.7 million, or
$0.14 per share
- Adjusted Net Income of $15.0
million, or $0.45 per
share
- Acquired one new aircraft in the quarter and five aircraft in
July
- New $75 million share repurchase
program
"We continue to rejuvenate our fleet through the sale of older
aircraft and their replacement with newer models," said
Colm Barrington, CEO of FLY.
"In the second quarter we sold six aircraft with an average age of
18 years and so far this year, we have purchased six aircraft with
an average age of approximately 2 years. We will continue
with our strategy of selling older aircraft opportunistically and
purchasing newer models prudently. In addition to actively
managing our portfolio, we see good value in our shares which trade
at a significant discount to book value. Yesterday we
approved a new $75 million share
repurchase program."
"FLY remains in a strong position to achieve its strategic
objectives with $382 million in
unrestricted cash and the capacity to acquire up to $2 billion worth of aircraft," added
Barrington. "Our fleet is 100% utilized and we continue to
see excellent demand for leased aircraft."
Financial Results
FLY is reporting net income of $4.7
million, or $0.14 per diluted
share, for the second quarter of 2016. This compares to a
restated net loss of $43.7 million,
or $1.06 per share, for the same
period in 2015.
Net income for the six months ended June
30, 2016 was $11.8 million, or
$0.35 per share. For the same
six month period in 2015, there was a restated net loss of
$23.8 million, or $0.59 per share.
Adjusted Net Income
Adjusted Net Income was $15.0
million for the second quarter of 2016 compared to
$12.4 million for the same period in
the previous year. On a per share basis, Adjusted Net Income
was $0.45 in the second quarter of
2016 compared to $0.30 for the second
quarter of 2015. For the six months ended June 30, 2016, Adjusted Net Income was
$31.4 million, or $0.93 per share, compared to $42.6 million, or $1.03 per share, in 2015.
Share Repurchases
FLY has repurchased approximately 20% of its shares since
September 30, 2015 for $106.2 million. Subsequent to quarter end,
FLY approved a new $75 million share
repurchase program to replace its previously authorized
$30 million program. There were
33.3 million shares outstanding at quarter end.
Financial Position
At June 30, 2016, FLY's total
assets were $3.2 billion, including
investment in flight equipment totaling $2.7
billion.
Cash and cash equivalents at June 30,
2016 totaled $476.9 million,
of which $382.1 million was
unrestricted. In addition, FLY had eight unencumbered
aircraft with a net book value of $531.8
million. The net book value per share at June 30, 2016 was $18.97.
Aircraft Portfolio
At June 30, 2016, FLY's 76
aircraft were on lease to 43 airlines in 29 countries. The
table does not show aircraft that were held for sale which totaled
two and thirteen at June 30, 2016 and
December 31, 2015, respectively, or
the two B767 aircraft owned by a joint venture in which FLY has a
57% interest.
|
Portfolio
at
|
Jun 30,
2016
|
Dec 31,
2015
|
|
Airbus
A319
|
10
|
10
|
|
Airbus
A320
|
15
|
14
|
|
Airbus
A321
|
3
|
3
|
|
Airbus
A330
|
4
|
4
|
|
Airbus
A340
|
2
|
3
|
|
Boeing 737
|
36
|
39
|
|
Boeing 757
|
3
|
3
|
|
Boeing 767
|
—
|
1
|
|
Boeing 777
|
2
|
2
|
|
Boeing 787
|
1
|
1
|
|
Total
|
76
|
80
|
At June 30, 2016, the average age
of the portfolio, weighted by net book value, was 6.8 years. The
average remaining lease term was 6.3 years, also weighted by net
book value. At June 30, 2016, our
fleet was 100% utilized and the 76 aircraft were generating
annualized rental revenue of approximately $293 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, July
28, 2016. Participants should call +1-253-237-1145
(International) or 800-535-7056 (North
America) and enter confirmation code 39862155. 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
ir@flyleasing.com
|
FLY Leasing
Limited
|
|
Consolidated
Statements of Income
|
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
Three months
ended
Jun. 30, 2016
(Unaudited)
|
Three months
ended
Jun. 30, 2015
(Restated &
Unaudited)
|
Six months
ended
Jun.
30, 2016
(Unaudited)
|
Six months
ended
Jun. 30,
2015
(Restated
&
Unaudited)
|
|
Revenues
|
|
|
|
|
|
Operating
lease rental revenue
|
$
73,874
|
$
103,406
|
$ 148,507
|
$
206,554
|
|
End of
lease revenue
|
4,876
|
3,676
|
8,082
|
25,612
|
|
Amortization of lease incentives
|
(2,317)
|
(4,757)
|
(5,090)
|
(8,793)
|
|
Amortization of lease premiums, discounts and other
|
(94)
|
(641)
|
(207)
|
(1,586)
|
|
Operating
lease revenue
|
76,339
|
101,684
|
151,292
|
221,787
|
|
Finance
lease income
|
884
|
—
|
1,776
|
—
|
|
Equity
earnings from unconsolidated subsidiary
|
131
|
341
|
264
|
681
|
|
Gain on
sale of aircraft
|
443
|
—
|
5,586
|
2,637
|
|
Interest
and other income
|
137
|
797
|
224
|
1,003
|
|
Total
revenues
|
77,934
|
102,822
|
159,142
|
226,108
|
|
Expenses
|
|
|
|
|
|
Depreciation
|
28,662
|
46,787
|
57,501
|
93,990
|
|
Aircraft
impairment
|
4,122
|
51,825
|
4,122
|
51,825
|
|
Interest
expense
|
29,474
|
37,232
|
60,308
|
76,529
|
|
Net loss
on modification and extinguishment of debt
|
612
|
2,119
|
5,139
|
6,169
|
|
Selling,
general and administrative
|
7,384
|
10,573
|
15,653
|
18,837
|
|
Ineffective, dedesignated and terminated derivatives
|
(22)
|
1,756
|
264
|
1,492
|
|
Maintenance and other costs
|
455
|
1,077
|
1,654
|
2,663
|
|
Total
expenses
|
70,687
|
151,369
|
144,641
|
251,505
|
|
Net income (loss)
before provision for income
taxes
|
7,247
|
(48,547)
|
14,501
|
(25,397)
|
|
Provision (benefit) for income taxes
|
2,570
|
(4,852)
|
2,724
|
(1,567)
|
|
Net income
(loss)
|
$
4,677
|
$
(43,695)
|
$
11,777
|
$
(23,830)
|
|
Weighted average
number of shares
|
|
|
|
|
|
-
Basic
|
33,580,886
|
41,456,784
|
33,934,334
|
41,444,957
|
|
-
Diluted
|
33,580,886
|
41,456,784
|
33,934,334
|
41,444,957
|
|
Earnings per
share
|
|
|
|
|
|
- Basic and
Diluted
|
$
0.14
|
$
(1.06)
|
$
0.35
|
$
(0.59)
|
|
Dividends declared
and paid per share
|
$
—
|
$
0.25
|
$
—
|
$
0.50
|
|
FLY Leasing
Limited
|
|
Consolidated
Balance Sheets
|
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
Jun.
30,
2016
(Unaudited)
|
Dec.
31,
2015
(Audited)
|
|
Assets
|
|
|
|
Cash and
cash equivalents
|
$
382,128
|
$
275,998
|
|
Restricted cash and cash equivalents
|
94,761
|
174,933
|
|
Rent
receivables
|
509
|
124
|
|
Investment in unconsolidated subsidiary
|
7,434
|
7,170
|
|
Investment in direct finance lease, net
|
34,185
|
34,878
|
|
Flight
equipment held for sale, net
|
32,741
|
237,262
|
|
Flight
equipment held for operating lease, net
|
2,524,145
|
2,585,426
|
|
Maintenance right asset, net
|
84,351
|
94,493
|
|
Fair
market value of derivative assets
|
—
|
241
|
|
Other
assets, net
|
6,071
|
6,450
|
|
Total
assets
|
$
3,166,325
|
$
3,416,975
|
|
Liabilities
|
|
|
|
Accounts
payable and accrued liabilities
|
$
14,330
|
$
17,548
|
|
Rentals
received in advance
|
13,977
|
14,560
|
|
Payable
to related parties
|
4,115
|
7,170
|
|
Security
deposits
|
43,854
|
48,876
|
|
Maintenance payment liability
|
198,657
|
194,543
|
|
Unsecured borrowings, net
|
690,399
|
689,409
|
|
Secured
borrowings, net
|
1,483,812
|
1,695,711
|
|
Deferred
tax liability, net
|
22,277
|
20,741
|
|
Fair
market value of derivative liabilities
|
27,824
|
19,327
|
|
Other
liabilities
|
34,482
|
52,126
|
|
Total
liabilities
|
2,533,727
|
2,760,011
|
|
Shareholders'
equity
|
|
|
|
Common
shares, $0.001 par value, 499,999,900 shares authorized; 33,347,990
and 35,671,400 shares issued and outstanding at June 30, 2016 and
December 31, 2015, respectively
|
33
|
36
|
|
Manager
shares, $0.001 par value; 100 shares authorized, issued and
outstanding
|
—
|
—
|
|
Additional paid in capital
|
549,473
|
577,290
|
|
Retained
earnings
|
106,915
|
95,138
|
|
Accumulated other comprehensive loss, net
|
(23,823)
|
(15,500)
|
|
Total
shareholders' equity
|
632,598
|
656,964
|
|
Total liabilities
and shareholders' equity
|
$
3,166,325
|
$
3,416,975
|
|
FLY Leasing
Limited
|
|
Consolidated
Statements of Cash Flows
|
|
(DOLLARS IN
THOUSANDS)
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
Six months
ended
|
|
|
|
Jun. 30, 2016
(Unaudited)
|
|
|
Jun. 30, 2015
(Restated &
Unaudited)
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
11,777
|
|
$
|
(23,830)
|
|
Adjustments to reconcile net income (loss) to net cash flows
provided by operating activities:
|
|
|
|
|
|
|
|
Equity in earnings from unconsolidated subsidiary
|
|
|
(264)
|
|
|
(681)
|
|
Direct finance lease income
|
|
|
(1,776)
|
|
|
—
|
|
Gain on sale of aircraft
|
|
|
(5,586)
|
|
|
(2,637)
|
|
Depreciation
|
|
|
57,501
|
|
|
93,990
|
|
Aircraft impairment
|
|
|
4,122
|
|
|
51,825
|
|
Amortization of debt discounts and issuance costs
|
|
|
4,695
|
|
|
5,957
|
|
Amortization of lease incentives
|
|
|
5,090
|
|
|
8,793
|
|
Amortization of lease discounts, premiums and other
items
|
|
|
206
|
|
|
1,321
|
|
Amortization of fair market value adjustments associated with the
GAAM acquisition
|
|
|
992
|
|
|
2,136
|
|
Net loss on modification and extinguishment of debt
|
|
|
4,121
|
|
|
5,160
|
|
Share-based compensation
|
|
|
—
|
|
|
195
|
|
Unrealized foreign exchange (gain) loss
|
|
|
530
|
|
|
(760)
|
|
Provision (benefit) for deferred income taxes
|
|
|
2,593
|
|
|
(1,915)
|
|
Unrealized loss on derivative instruments
|
|
|
183
|
|
|
1,211
|
|
Cash receipts in settlement of maintenance rights
|
|
|
6,150
|
|
|
—
|
|
Security deposits and maintenance payment liability recognized into
earnings
|
|
|
(3,450)
|
|
|
(25,612)
|
|
Security deposits and maintenance payment claims applied towards
operating lease revenues
|
|
|
(805)
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Rent
receivables
|
|
|
(597)
|
|
|
6,825
|
|
Other
assets
|
|
|
(233)
|
|
|
1,507
|
|
Payable to related
parties
|
|
|
(7,234)
|
|
|
(3,008)
|
|
Accounts payable,
accrued and other liabilities
|
|
|
(1,701)
|
|
|
795
|
|
Net cash flows
provided by operating activities
|
|
|
76,314
|
|
|
121,272
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
Rent received from
direct finance lease
|
|
|
2,460
|
|
|
—
|
|
Purchase of flight
equipment
|
|
|
(40,488)
|
|
|
(156,196)
|
|
Proceeds from sale of
aircraft
|
|
|
209,382
|
|
|
126,503
|
|
Payment for aircraft
improvement
|
|
|
(2,255)
|
|
|
(6,255)
|
|
Lessor payments for
lease incentive obligations
|
|
|
(1,600)
|
|
|
(13,206)
|
|
Net cash flows
provided by (used in) investing activities
|
|
|
167,499
|
|
|
(49,154)
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
|
|
Jun. 30,
2016
(Unaudited)
|
|
Jun. 30,
2015
(Restated &
Unaudited)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
Restricted cash and
cash equivalents
|
|
|
80,172
|
|
|
27,242
|
|
Security deposits
received
|
|
|
920
|
|
|
3,815
|
|
Security deposits
returned
|
|
|
(3,682)
|
|
|
(6,618)
|
|
Maintenance payment
liability receipts
|
|
|
36,343
|
|
|
42,163
|
|
Maintenance payment
liability disbursements
|
|
|
(2,278)
|
|
|
(32,891)
|
|
Net swap termination
payments
|
|
|
(709)
|
|
|
23
|
|
Debt issuance
costs
|
|
|
(832)
|
|
|
(914)
|
|
Proceeds from secured
borrowings
|
|
|
84,249
|
|
|
147,277
|
|
Repayment of secured
borrowings
|
|
|
(304,938)
|
|
|
(217,890)
|
|
Shares
repurchased
|
|
|
(26,944)
|
|
|
—
|
|
Dividends
|
|
|
—
|
|
|
(20,716)
|
|
Dividend
equivalents
|
|
|
—
|
|
|
(644)
|
|
Net cash flows
used in financing activities
|
|
|
(137,699)
|
|
|
(59,153)
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
16
|
|
|
(305)
|
|
Net increase in
cash
|
|
|
106,130
|
|
|
12,660
|
|
Cash at beginning of
period
|
|
|
275,998
|
|
|
337,560
|
|
Cash at end of
period
|
|
$
|
382,128
|
|
$
|
350,220
|
|
Supplemental
Disclosure:
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
55,047
|
|
$
|
70,454
|
|
Taxes
|
|
|
336
|
|
|
115
|
|
Noncash
Activities:
|
|
|
|
|
|
|
|
Security deposits
applied to maintenance payment liability and rent
receivables
|
|
|
—
|
|
|
3,175
|
|
Maintenance payment
liability applied to rent receivables
|
|
|
—
|
|
|
2,108
|
|
Other liabilities
applied to maintenance payment liability, security deposits and
rent receivables
|
|
|
960
|
|
|
240
|
|
Noncash
activities:
|
|
|
|
|
|
|
|
Aircraft
improvement
|
|
|
206
|
|
|
2,765
|
|
Noncash activities in
connection with purchase of aircraft
|
|
|
2,687
|
|
|
20,344
|
|
Noncash activities in
connection with sale of aircraft
|
|
|
35,628
|
|
|
9,016
|
|
|
|
|
|
|
|
|
|
FLY Leasing
Limited
|
|
Reconciliation of
Non-GAAP Measures
|
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
Three months
ended
Jun. 30, 2016
(Unaudited)
|
Three months
ended
Jun. 30, 2015
(Restated &
Unaudited)
|
Six months
ended
Jun. 30,
2016
(Unaudited)
|
Six months
ended
Jun. 30,
2015
(Restated
&
Unaudited)
|
|
Net income
(loss)
|
$
4,677
|
$
(43,695)
|
$
11,777
|
$
(23,830)
|
|
Adjustments:
|
|
|
|
|
|
Aircraft
impairment
|
4,122
|
51,825
|
4,122
|
51,825
|
|
Amortization of debt discounts and loan issue costs
|
2,335
|
2,847
|
4,695
|
5,957
|
|
Amortization of lease premiums, discounts and
other
|
93
|
602
|
206
|
1,321
|
|
Amortization of fair value adjustments recorded in purchase
accounting
|
320
|
899
|
992
|
2,136
|
|
Net loss
on modification and extinguishment of debt
|
612
|
2,119
|
5,139
|
6,169
|
|
Non-cash
share based compensation
|
—
|
43
|
—
|
195
|
|
Professional
fees related to restatement
|
851
|
—
|
1,101
|
—
|
|
Unrealized foreign exchange (gain) loss
|
(471)
|
910
|
530
|
(760)
|
|
Deferred
income taxes
|
2,499
|
(4,953)
|
2,593
|
(1,915)
|
|
Ineffective, dedesignated and terminated derivatives
|
(22)
|
1,756
|
264
|
1,492
|
|
Adjusted Net
Income
|
$
15,016
|
$
12,353
|
$
31,419
|
$
42,590
|
|
Average
Shareholders' Equity
|
$
632,627
|
$
736,292
|
$
644,781
|
$
734,586
|
|
Adjusted Return on
Equity
|
9.5%
|
6.7%
|
9.7%
|
11.6%
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
33,580,886
|
41,456,784
|
33,934,334
|
41,444,957
|
|
Adjusted Net
Income per share
|
$
0.45
|
$
0.30
|
$
0.93
|
$
1.03
|
|
|
|
|
|
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 non-cash 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 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 items, 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.
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SOURCE FLY Leasing Limited