201505080800PR_NEWS_USPR_____SF02898 20150508T080000-0400 prnewswire.com 20150508 SF02898 1 urn:newsml:prnewswire.com:20150508:SF02898:1 20150508T080000-0400 20150508T080000-0400 MimeType/@FormalName FLY Leasing Reports First Quarter 2015 Financial Results DUBLIN, May 8, 2015 FLY-LEASING-1Q-Earns 201505080800PR_NEWS_USPR_____SF02898.xml FLY Leasing Reports First Quarter 2015 Financial Results

FLY Leasing Reports First Quarter 2015 Financial Results

PR Newswire

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.

FLY Leasing Limited logo

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,
2015

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
ir@flyleasing.com



FLY Leasing Limited

Consolidated Statements of Income


(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Three month
period ended
Mar. 31, 2015
(Unaudited)

Three month
period ended
Mar. 31, 2014
(Unaudited)

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,
2015
(Unaudited)

Dec. 31,
2014
(Audited)

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
period ended
Mar. 31, 2015
(Unaudited)
   


Three month
period ended
Mar. 31, 2014
(Unaudited)


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
period ended
Mar. 31, 2015
(Unaudited)
 


Three month
period ended
Mar. 31, 2014
(Unaudited)


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
period ended
March 31, 2015
(Unaudited)

Three month
period ended
March 31, 2014
(Unaudited)

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