DUBLIN, Aug. 10, 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 second quarter of 2017.
Second Quarter 2017 Highlights
- Net income of $2.9 million,
nine cents per share
- Adjusted Net Income of $9.7
million, 31 cents per
share
- Repurchased nearly two million shares at an average price of
$13.07 per share
- Acquired five aircraft, four of which were new deliveries from
manufacturers
- Upsized Term Loan by $50
million
- Repriced Term Loan, saving approximately $2 million in annual interest
"We grew our fleet by investing $290
million in five aircraft in the second quarter, including
four new aircraft purchased from the manufacturers," said
Colm Barrington, CEO of FLY. "The
five aircraft are on leases with an average term of 11 years,
further enhancing the overall quality of our fleet. We expect to
see improved earnings from these aircraft, and others in our
pipeline, as the year progresses."
"FLY continues to aggressively repurchase its shares," added
Barrington. "In the second quarter, we bought back nearly two
million shares for a total of $25.9
million. At quarter end, we repurchased approximately 6.5
percent of the shares outstanding at the beginning of the year. Our
average repurchase price of just over $13 per share has helped increase our net book
value per share this year to $19.08."
"We are focused on growth and have a strong pipeline of
attractive aircraft investments that we expect to announce in the
coming months," said Barrington. "We expect to meet our
$750 million acquisition target in
2017 – and we have the financial resources to acquire an additional
$2 billion of aircraft."
Financial Results
FLY is reporting net income of $2.9
million, or $0.09 per diluted
share, for the second quarter of 2017. This compares to net income
of $4.7 million, or $0.14 per share, for the same period in
2016.
Net income for the six months ended June
30, 2017 was $7.9 million, or
$0.25 per share. For the same
six month period in 2016, net income was $11.8 million, or $0.35 per share.
Adjusted Net Income
Adjusted Net Income was $9.7
million for the second quarter of 2017, compared to
$15.0 million for the same period in
the previous year. On a per share basis, Adjusted Net Income was
$0.31 in the second quarter of 2017,
compared to $0.45 for the second
quarter of 2016. For the six months ended June 30, 2017, Adjusted Net Income was
$20.8 million, or $0.65 per share, compared to $31.4 million, or $0.93 per share, for the same six month period in
2016.
A reconciliation of Adjusted Net Income to net income determined
in accordance with GAAP is shown below.
Share Repurchases
During the first six months of 2017, FLY repurchased 2.1 million
shares for approximately $27.2
million at an average price of $13.06 per share. At June
30, 2017, approximately $39.4
million remained under the share repurchase authorization.
Subsequent to quarter end, FLY repurchased 740,957 shares at an
average price of $13.77 per share
through August 9, 2017. As of
August 9, 2017, approximately
$29 million remained under the share
repurchase authorization.
Financial Position
At June 30, 2017, FLY's total
assets were $3.5 billion, including
investment in flight equipment totaling $3.0
billion. Total cash at June 30,
2017 was $455.2 million, of
which $335.5 was unrestricted.
The book value per share at June 30,
2017 was $19.08.
Aircraft Portfolio
At June 30, 2017, FLY's 81
aircraft were on lease to 45 airlines in 29 countries. The
table below does not show the two B767 aircraft owned by a joint
venture in which FLY has a 57% interest.
Portfolio
at
|
Jun 30,
2017
|
Dec 31,
2016
|
Airbus
A319
|
9
|
9
|
Airbus
A320
|
13
|
12
|
Airbus
A321
|
3
|
3
|
Airbus
A330
|
3
|
3
|
Airbus
A340
|
2
|
2
|
Boeing 737
|
41
|
38
|
Boeing 757
|
3
|
3
|
Boeing 777
|
2
|
2
|
Boeing 787
|
5
|
4
|
Total
|
81
|
76
|
At June 30, 2017, the average age
of the portfolio, weighted by net book value of each aircraft, was
6.1 years. The average remaining lease term was 6.8 years, also
weighted by net book value. At June 30,
2017, the 81 aircraft were generating annualized rental
revenue of approximately $352
million. FLY's lease utilization factor was 100% for the
second quarter of 2017.
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, August
10, 2017. Participants should call +1-253-237-1145
(International) or 800-535-7056 (North
America) and enter confirmation code 44952823. 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
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, 2017
(Unaudited)
|
Three months
ended Jun. 30, 2016
(Unaudited)
|
Six months
ended Jun.
30, 2017 (Unaudited)
|
Six months
ended Jun. 30,
2016 (Unaudited)
|
Revenues
|
|
|
|
|
Operating lease rental revenue
|
$
81,181
|
$
73,874
|
$ 160,502
|
$
148,507
|
End of
lease revenue
|
—
|
4,876
|
1,239
|
8,082
|
Amortization of lease incentives
|
(1,871)
|
(2,317)
|
(3,646)
|
(5,090)
|
Amortization of lease premiums, discounts and other
|
(101)
|
(94)
|
(183)
|
(207)
|
Operating lease
revenue
|
79,209
|
76,339
|
157,912
|
151,292
|
Finance
lease income
|
185
|
884
|
373
|
1,776
|
Equity
earnings from unconsolidated subsidiary
|
127
|
131
|
252
|
264
|
Gain on
sale of aircraft
|
—
|
443
|
—
|
5,586
|
Interest
and other income
|
311
|
137
|
561
|
224
|
Total
revenues
|
79,832
|
77,934
|
159,098
|
159,142
|
Expenses
|
|
|
|
|
Depreciation
|
33,074
|
28,662
|
65,125
|
57,501
|
Aircraft
impairment
|
—
|
4,122
|
—
|
4,122
|
Interest
expense
|
31,890
|
29,474
|
63,723
|
60,308
|
Net loss
on modification and extinguishment of debt
|
1,885
|
612
|
2,429
|
5,139
|
Selling,
general and administrative
|
7,978
|
7,384
|
16,270
|
15,653
|
Ineffective, dedesignated and terminated derivatives
|
424
|
(22)
|
373
|
264
|
Maintenance and other costs
|
758
|
455
|
1,230
|
1,654
|
Total
expenses
|
76,009
|
70,687
|
149,150
|
144,641
|
Net income before
provision for income
taxes
|
3,823
|
7,247
|
9,948
|
14,501
|
Provision for income taxes
|
943
|
2,570
|
2,016
|
2,724
|
Net
income
|
$
2,880
|
$
4,677
|
$
7,932
|
$
11,777
|
Weighted average
number of shares
|
|
|
|
|
-
Basic
|
31,364,594
|
33,580,886
|
31,802,107
|
33,934,334
|
-
Diluted
|
31,388,034
|
33,580,886
|
31,838,737
|
33,934,334
|
Earnings per
share
|
|
|
|
|
- Basic and
Diluted
|
$
0.09
|
$
0.14
|
$
0.25
|
$
0.35
|
FLY Leasing
Limited
|
Consolidated
Balance Sheets
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Jun.
30,
2017 (Unaudited)
|
Dec.
31, 2016 (Audited)
|
Assets
|
|
|
Cash and
cash equivalents
|
$
335,473
|
$
517,964
|
Restricted cash and cash equivalents
|
119,704
|
94,123
|
Rent
receivables
|
19
|
419
|
Investment in unconsolidated subsidiary
|
7,951
|
7,700
|
Investment in finance lease, net
|
14,488
|
15,095
|
Flight
equipment held for operating lease, net
|
2,923,635
|
2,693,821
|
Maintenance right asset, net
|
106,223
|
101,969
|
Fair
value of derivative assets
|
1,939
|
1,905
|
Deferred
tax assets
|
7,195
|
7,445
|
Other
assets, net
|
6,804
|
6,568
|
Total
assets
|
$
3,523,431
|
$
3,447,009
|
Liabilities
|
|
|
Accounts
payable and accrued liabilities
|
$
16,408
|
$
13,786
|
Rentals
received in advance
|
14,817
|
13,123
|
Payable
to related parties
|
3,188
|
5,042
|
Security
deposits
|
49,832
|
42,495
|
Maintenance payment liability
|
216,549
|
182,571
|
Unsecured borrowings, net
|
692,381
|
691,390
|
Secured
borrowings, net
|
1,886,854
|
1,831,985
|
Deferred
tax liability, net
|
21,863
|
19,847
|
Fair
value of derivative liabilities
|
11,315
|
13,281
|
Other
liabilities
|
34,567
|
40,254
|
Total
liabilities
|
2,947,774
|
2,853,774
|
Shareholders'
equity
|
|
|
Common
shares, $0.001 par value, 499,999,900 shares authorized; 30,174,969
and 32,256,440 shares issued and outstanding at June 30, 2017 and
December 31, 2016, respectively
|
30
|
32
|
Manager
shares, $0.001 par value; 100 shares authorized, issued and
outstanding
|
—
|
—
|
Additional paid in capital
|
509,628
|
536,922
|
Retained
earnings
|
73,958
|
66,026
|
Accumulated other comprehensive loss, net
|
(7,959)
|
(9,745)
|
Total
shareholders' equity
|
575,657
|
593,235
|
Total liabilities
and shareholders' equity
|
$
3,523,431
|
$
3,447,009
|
FLY Leasing
Limited
|
Consolidated
Statements of Cash Flows
|
(DOLLARS IN
THOUSANDS)
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
|
|
Jun. 30,
2017
(Unaudited)
|
|
Jun. 30,
2016
(Unaudited)
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,932
|
|
$
|
11,777
|
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
|
|
|
|
|
|
|
Equity in earnings
from unconsolidated subsidiary
|
|
|
(252)
|
|
|
(264)
|
|
Finance lease
income
|
|
|
(373)
|
|
|
(1,776)
|
|
Gain on sale of
aircraft
|
|
|
—
|
|
|
(5,586)
|
|
Depreciation
|
|
|
65,125
|
|
|
57,501
|
|
Aircraft
impairment
|
|
|
—
|
|
|
4,122
|
|
Amortization of debt
discounts and issuance costs
|
|
|
4,090
|
|
|
4,695
|
|
Amortization of lease
incentives
|
|
|
3,646
|
|
|
5,090
|
|
Amortization of lease
discounts, premiums and other items
|
|
|
183
|
|
|
206
|
|
Amortization of GAAM
acquisition fair value adjustments
|
|
|
622
|
|
|
992
|
|
Net loss on debt
modification and extinguishment
|
|
|
2,429
|
|
|
4,121
|
|
Unrealized foreign
exchange loss
|
|
|
1,528
|
|
|
530
|
|
Provision for deferred
income taxes
|
|
|
1,988
|
|
|
2,593
|
|
Loss on derivative
instruments
|
|
|
229
|
|
|
183
|
|
Security deposits and
maintenance payment liability recognized into earnings
|
|
|
—
|
|
|
(3,450)
|
|
Security deposits and
maintenance payment claims applied towards operating lease
revenues
|
|
|
—
|
|
|
(805)
|
|
Cash receipts in
settlement of maintenance rights
|
|
|
—
|
|
|
6,150
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Rent
receivables
|
|
|
(601)
|
|
|
(597)
|
|
Other
assets
|
|
|
(287)
|
|
|
(233)
|
|
Payable to related
parties
|
|
|
(6,197)
|
|
|
(7,234)
|
|
Accounts payable,
accrued and other liabilities
|
|
|
248
|
|
|
(1,701)
|
|
Net cash flows
provided by operating activities
|
|
|
80,310
|
|
|
76,314
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
Rent received from
finance lease
|
|
|
980
|
|
|
2,460
|
|
Purchase of flight
equipment
|
|
|
(279,044)
|
|
|
(40,488)
|
|
Proceeds from sale of
aircraft, net
|
|
|
—
|
|
|
209,382
|
|
Payment for aircraft
improvement
|
|
|
(5,157)
|
|
|
(2,255)
|
|
Payments for lessor
maintenance obligations
|
|
|
(6,782)
|
|
|
(1,600)
|
|
Net cash flows
provided by (used in) investing activities
|
|
|
(290,003)
|
|
|
167,499
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
|
|
Jun. 30,
2017
(Unaudited)
|
|
Jun. 30,
2016
(Unaudited)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
Restricted cash and
cash equivalents
|
|
|
(25,575)
|
|
|
80,172
|
|
Security deposits
received
|
|
|
5,424
|
|
|
920
|
|
Security deposits
returned
|
|
|
(1,080)
|
|
|
(3,682)
|
|
Maintenance payment
liability receipts
|
|
|
35,455
|
|
|
36,343
|
|
Maintenance payment
liability disbursements
|
|
|
(8,905)
|
|
|
(2,278)
|
|
Net swap termination
payments
|
|
|
—
|
|
|
(709)
|
|
Debt extinguishment
costs
|
|
|
(498)
|
|
|
—
|
|
Debt issuance
costs
|
|
|
(64)
|
|
|
(832)
|
|
Proceeds from secured
borrowings
|
|
|
147,179
|
|
|
84,249
|
|
Repayment of secured
borrowings
|
|
|
(99,423)
|
|
|
(304,938)
|
|
Shares
repurchased
|
|
|
(25,493)
|
|
|
(26,944)
|
|
Net cash flows
provided by (used in) financing activities
|
|
|
27,020
|
|
|
(137,699)
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
182
|
|
|
16
|
|
Net increase
(decrease) in cash
|
|
|
(182,491)
|
|
|
106,130
|
|
Cash and cash
equivalents at beginning of period
|
|
|
517,964
|
|
|
275,998
|
|
Cash and cash
equivalents at end of period
|
|
$
|
335,473
|
|
$
|
382,128
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure:
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
58,242
|
|
$
|
55,047
|
|
Taxes
|
|
|
1,912
|
|
|
336
|
|
Noncash investing
Activities:
|
|
|
|
|
|
|
|
Other liabilities
applied to maintenance payment liability, security deposits, and
rent receivables
|
|
|
690
|
|
|
960
|
|
Noncash
activities:
|
|
|
|
|
|
|
|
Aircraft
improvement
|
|
|
192
|
|
|
206
|
|
Noncash activities in
connection with purchase of aircraft
|
|
|
10,546
|
|
|
2,687
|
|
Noncash activities in
connection with sale of aircraft
|
|
|
—
|
|
|
35,628
|
|
FLY Leasing
Limited
|
Reconciliation of
Non-GAAP Measures
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three months
ended Jun. 30, 2017
(Unaudited)
|
Three months
ended Jun. 30, 2016
(Unaudited)
|
Six months
ended Jun. 30,
2017 (Unaudited)
|
Six months
ended Jun. 30,
2016 (Unaudited)
|
Net income
|
$
2,880
|
$
4,677
|
$
7,932
|
$
11,777
|
Adjustments:
|
|
|
|
|
Aircraft
impairment
|
—
|
4,122
|
—
|
4,122
|
Amortization of debt discounts and issue costs
|
1,971
|
2,335
|
4,090
|
4,695
|
Amortization of lease premiums, discounts and
other
|
100
|
93
|
183
|
206
|
Amortization of fair value adjustments recorded in purchase
accounting
|
147
|
320
|
622
|
992
|
Net loss
on debt modification and extinguishment
|
1,885
|
612
|
2,429
|
5,139
|
Professional fees related to restatement
|
—
|
851
|
—
|
1,101
|
Transaction fees and expenses
|
64
|
—
|
1,669
|
—
|
Unrealized foreign exchange (gain) loss
|
1,309
|
(471)
|
1,528
|
530
|
Deferred
income taxes
|
930
|
2,499
|
1,988
|
2,593
|
(Gain)
loss on ineffective, dedesignated and terminated
derivatives
|
424
|
(22)
|
373
|
264
|
Adjusted Net
Income
|
$
9,710
|
$
15,016
|
$
20,814
|
$
31,419
|
Average
Shareholders' Equity
|
$
587,283
|
$
632,627
|
$
589,267
|
$
644,781
|
Adjusted Return on
Equity
|
6.6%
|
9.5%
|
7.1%
|
9.7%
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
31,388,034
|
33,580,886
|
31,838,737
|
33,934,334
|
Adjusted Net
Income per diluted share
|
$
0.31
|
$
0.45
|
$
0.65
|
$
0.93
|
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-recurring expenses;
(vi) unrealized foreign exchange gains and losses; (vii) deferred
income taxes; and (viii) the ineffective portion and gains and
losses 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