DUBLIN, July 29, 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 second quarter of 2015.
Second Quarter 2015 Highlights
- Adjusted Net Income of $9.5
million, or $0.23 per
share
- Net loss of $58.3 million after a
$65.4 million impairment charge
- Contracted to sell 33 aircraft which will generate a
$35 million pre-tax gain
- Re-priced Term Loan, saving $4
million in annual interest cost
- Reduced BBAM management fee by $5
million, or 47%, annually
- Declared 31st consecutive quarterly dividend on
July 15 ($0.25 per share)
"In the second quarter, FLY achieved a major milestone in its
fleet rejuvenation plan with an agreement to sell a portfolio of 33
aircraft, transforming its portfolio and setting a course to drive
stronger returns," said Colm
Barrington, CEO of FLY. "Combined with the sale of
eight B757s previously announced, we have agreements to sell a
total of 41 aircraft averaging 12.9 years of age at June 30.
These sales accomplish several key objectives, including lowering
our fleet age, generating approximately $450
million of additional cash and reducing our financial
leverage."
"We are actively managing the company's capital structure while
reducing operating costs," added Barrington. "In connection
with the aircraft sales, BBAM has reduced its management fee by
nearly half, demonstrating a strong commitment to its long-term
partnership with FLY, as well as its aligned goal of maximizing
returns for FLY shareholders. In addition, the re-pricing of
our Term Loan will reduce our interest costs by about $4 million annually."
"Following completion of these sale transactions, FLY will be in
a very strong position to grow by reinvesting in newer, younger
aircraft and generating higher returns for its shareholders."
Financial Results
FLY is reporting a net loss of $58.3
million or $1.42 per diluted
share for the second quarter of 2015. This compares to net
income of $21.7 million or
$0.51 per diluted share for the same
period of 2014. The second quarter 2015 loss reflects a
non-cash $65.4 million impairment
charge. The second quarter 2014 results include $18.9 million in gains from aircraft sales.
Operating lease revenue for the second quarter of 2015 increased
by $11.7 million to $101.7 million, 13.0% more than in the same
period in the previous year.
The net loss for the six month period ended June 30, 2015 was $41.0
million, or $1.00 per share,
after the impairment charge taken in the second quarter. For the
six month period ended June 30, 2015,
operating lease revenue increased 23.5% to $221.8 million.
Adjusted Net Income
Adjusted Net Income for the second quarter of 2015 was
$9.5 million ($0.23 per share) as compared to $26 million ($0.63
per share) in the same quarter of 2014. For the six month
period ended June 30, 2015, Adjusted
Net Income was $36.1 million
($0.87 per share) as compared to
$35.9 million ($0.87 per share) for the same period in 2014.
Dividend
On July 15, 2015, FLY declared a
dividend of $0.25 per share in
respect of the second quarter of 2015. This dividend will be paid
on August 20, 2015 to shareholders of
record on July 31, 2015. This
dividend is FLY's 31st consecutive quarterly
dividend. Dividends declared since FLY listed on the NYSE in
September 2007 total $7.87 per share.
Financial Position
At June 30, 2015, FLY's total
assets were $4.1 billion, and include
$2.7 billion of flight equipment held
for operating lease and $933.7
million of flight equipment held for sale. The
aircraft classified as held for sale are subject to a definitive
sale agreement and are expected to be transferred to the buyer over
the next six months.
Total cash at June 30, 2015 was
$462.1 million, of which $350.2 million was unrestricted. This
compares to total cash of $476.7
million at December 31, 2014,
of which $337.6 million was
unrestricted. Further, at June 30,
2015, FLY owned 15 unencumbered aircraft with a net book
value of $558.7 million.
Aircraft Portfolio
At June 30, 2015, FLY's 96
aircraft held for operating lease, shown in the table below, were
on lease to 49 lessees in 30 countries. The table does not include
33 aircraft that are held for sale at June
30, 2015 or two B767 aircraft owned by a joint venture in
which FLY has a 57% interest.
|
Portfolio
at
|
Jun 30,
2015
|
Dec 31,
2014
|
|
Airbus
A319
|
13
|
18
|
|
Airbus
A320
|
19
|
27
|
|
Airbus
A321
|
3
|
3
|
|
Airbus
A330
|
3
|
4
|
|
Airbus
A340
|
3
|
3
|
|
Boeing 737
|
41
|
57
|
|
Boeing 747
|
1
|
1
|
|
Boeing 757
|
11
|
11
|
|
Boeing 767
|
1
|
1
|
|
Boeing 777
|
-
|
1
|
|
Boeing 787
|
1
|
1
|
|
Total
|
96
|
127
|
At June 30, 2015, the average age
of FLY's aircraft held for operating lease, weighted by the net
book value of each aircraft, was 8.0 years. The average remaining
lease term was 5.2 years, also weighted by net book value. At
June 30, 2015, these leases were
generating annualized revenues of approximately $310 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 Wednesday, July
29, 2015. Participants should call +1-253-237-1145
(International) or 800-535-7056 (North
America) and enter confirmation code 73317082 or ask an
operator for the FLY Leasing earnings call. A replay will be
available shortly after the call. To access the replay, please dial
+1-404-537-3406 (International) or 855-859-2056 (North America) and enter confirmation code
73317082. The telephone replay will be available for ten
days. A live webcast of the conference call will be also
available in the investor section of FLY's website at
www.flyleasing.com. An archived webcast will be available for one
year.
About FLY
FLY acquires and leases modern, high-demand and fuel-efficient
commercial jet aircraft under multi-year operating lease contracts
to a diverse group of airlines throughout the world. FLY is managed
and serviced by BBAM LP, one of the world's leading aircraft lease
managers with more than 20 years of experience. 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. 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, 2015
(Unaudited)
|
Three months
ended
Jun. 30, 2014
(Unaudited)
|
Six months
ended
Jun.
30, 2015
(Unaudited)
|
Six months
ended
Jun. 30,
2014
(Unaudited)
|
|
Revenues
|
|
|
|
|
|
Operating
lease rental revenue
|
$ 103,406
|
$ 94,575
|
$ 206,554
|
$ 185,111
|
|
End of
lease revenue
|
3,676
|
175
|
25,612
|
3,854
|
|
Amortization of lease incentives
|
(4,757)
|
(3,833)
|
(8,793)
|
(7,221)
|
|
Amortization of lease premiums, discounts and other
|
(641)
|
(951)
|
(1,586)
|
(2,151)
|
|
Operating lease revenue
|
101,684
|
89,966
|
221,787
|
179,593
|
|
Equity
earnings from unconsolidated subsidiary
|
341
|
359
|
681
|
1,741
|
|
Gain on
sale of aircraft
|
—
|
18,855
|
1,897
|
18,855
|
|
Interest
and other income
|
797
|
334
|
1,003
|
644
|
|
Total
revenues
|
102,822
|
109,514
|
225,368
|
200,833
|
|
Expenses
|
|
|
|
|
|
Depreciation
|
49,662
|
42,125
|
99,736
|
82,528
|
|
Aircraft
impairment
|
65,398
|
—
|
65,398
|
—
|
|
Interest
expense
|
37,232
|
33,819
|
76,529
|
68,444
|
|
Selling,
general and administrative
|
10,573
|
11,329
|
18,837
|
20,944
|
|
Ineffective, dedesignated and terminated derivatives
|
1,756
|
97
|
1,492
|
32
|
|
Net
(gain) loss on debt modification and extinguishment
|
2,119
|
(4,010)
|
6,169
|
(3,995)
|
|
Maintenance and other costs
|
1,077
|
1,584
|
2,663
|
3,994
|
|
Total
expenses
|
167,817
|
84,944
|
270,824
|
171,947
|
|
Net income (loss)
before provision for
income taxes
|
(64,995)
|
24,570
|
(45,456)
|
28,886
|
|
Provision (benefit) for income taxes
|
(6,740)
|
2,896
|
(4,467)
|
3,649
|
|
Net income
(loss)
|
$
(58,255)
|
$ 21,674
|
$ (40,989)
|
$ 25,237
|
|
Weighted average
number of shares
|
|
|
|
|
|
-
Basic
|
41,456,784
|
41,419,515
|
41,444,957
|
41,376,963
|
|
-
Diluted
|
41,456,784
|
41,446,070
|
41,444,957
|
41,420,045
|
|
Earnings per
share
|
|
|
|
|
|
- Basic and
Diluted
|
$ (1.42)
|
$ 0.51
|
$ (1.00)
|
$ 0.58
|
|
Dividends declared
and paid per share
|
$ 0.25
|
$ 0.25
|
$ 0.50
|
$ 0.50
|
|
|
|
FLY Leasing
Limited
|
|
Consolidated
Balance Sheets
|
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Jun.
30,
2015
(Unaudited)
|
Dec. 31,
2014
(Audited)
|
|
Assets
|
|
|
|
Cash and
cash equivalents
|
$ 350,220
|
$ 337,560
|
|
Restricted cash and cash equivalents
|
111,897
|
139,139
|
|
Rent
receivables
|
1,633
|
4,887
|
|
Investment in unconsolidated subsidiary
|
4,683
|
4,002
|
|
Flight
equipment held for sale, net
|
933,662
|
—
|
|
Flight
equipment held for operating lease, net
|
2,660,638
|
3,705,407
|
|
Fair
value of derivative assets
|
487
|
2,067
|
|
Other
assets, net
|
23,511
|
31,608
|
|
Total
assets
|
$ 4,086,731
|
$ 4,224,670
|
|
Liabilities
|
|
|
|
Accounts
payable and accrued liabilities
|
$ 19,903
|
$ 18,431
|
|
Rentals
received in advance
|
17,781
|
19,751
|
|
Payable
to related parties
|
3,328
|
2,772
|
|
Security
deposits
|
59,153
|
64,058
|
|
Maintenance payment liability
|
250,425
|
254,514
|
|
Unsecured borrowings, net
|
690,280
|
689,452
|
|
Secured
borrowings, net
|
2,268,900
|
2,335,328
|
|
Deferred
tax liability, net
|
11,946
|
16,289
|
|
Fair
value of derivative liabilities
|
21,100
|
23,311
|
|
Other
liabilities
|
45,536
|
41,890
|
|
Total
liabilities
|
3,388,352
|
3,465,796
|
|
Shareholders'
equity
|
|
|
|
Common
shares, $0.001 par value, 499,999,900 shares authorized; 41,469,073
and 41,432,998 shares issued and outstanding at June 30, 2015 and
December 31, 2014, respectively
|
41
|
41
|
|
Manager
shares, $0.001 par value; 100 shares authorized, issued and
outstanding
|
—
|
—
|
|
Additional paid in capital
|
658,717
|
658,522
|
|
Retained
earnings
|
55,053
|
117,402
|
|
Accumulated other comprehensive loss, net
|
(15,432)
|
(17,091)
|
|
Total
shareholders' equity
|
698,379
|
758,874
|
|
Total liabilities
and shareholders' equity
|
$ 4,086,731
|
$ 4,224,670
|
|
|
|
FLY Leasing
Limited
|
|
Consolidated
Statements of Cash Flows
|
|
(DOLLARS IN
THOUSANDS)
|
|
|
Six months
ended
Jun. 30, 2015
(Unaudited)
|
|
Six months ended
Jun. 30, 2014
(Unaudited)
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(40,989)
|
|
$
|
25,237
|
|
Adjustments to reconcile net income to net cash flows provided by
operating activities:
|
|
|
|
|
|
|
Equity in earnings
from unconsolidated subsidiary
|
|
(681)
|
|
|
(1,741)
|
|
Gain on sale of
aircraft
|
|
(1,897)
|
|
|
(18,855)
|
|
Depreciation
|
|
99,736
|
|
|
82,528
|
|
Aircraft
impairment
|
|
65,398
|
|
|
—
|
|
Amortization of debt
discounts and loan issuance costs
|
|
5,957
|
|
|
6,239
|
|
Amortization of lease
incentives
|
|
8,793
|
|
|
7,221
|
|
Amortization of lease
discounts, premiums and other items
|
|
1,321
|
|
|
1,457
|
|
Amortization of fair
value adjustments associated with the GAAM acquisition
|
|
2,136
|
|
|
3,531
|
|
Net (gain) loss on
debt modification and extinguishment
|
|
5,160
|
|
|
(4,048)
|
|
Share-based
compensation
|
|
195
|
|
|
(36)
|
|
Unrealized foreign
exchange (gain) loss on cash balances
|
|
305
|
|
|
(20)
|
|
Unrealized foreign
exchange gain on Euro denominated borrowing
|
|
(1,065)
|
|
|
—
|
|
Provision for deferred
income taxes
|
|
(4,815)
|
|
|
3,649
|
|
Unrealized loss on
derivative instruments
|
|
1,211
|
|
|
32
|
|
Security deposits and
maintenance payment liability relieved
|
|
(25,612)
|
|
|
(3,443)
|
|
Distribution from
unconsolidated subsidiary
|
|
—
|
|
|
4,786
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Rent receivables
|
|
6,825
|
|
|
(2,877)
|
|
Other assets
|
|
1,507
|
|
|
1,768
|
|
Payable to related parties
|
|
(3,008)
|
|
|
(3,499)
|
|
Accounts payable and accrued liabilities
|
|
(1,482)
|
|
|
1,060
|
|
Rentals received in advance
|
|
(1,970)
|
|
|
(724)
|
|
Other liabilities
|
|
4,247
|
|
|
4,405
|
|
Net cash flows
provided by operating activities
|
|
121,272
|
|
|
106,670
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Distribution from unconsolidated subsidiary
|
|
—
|
|
|
1,847
|
|
Purchase
of flight equipment
|
|
(156,196)
|
|
|
(289,259)
|
|
Proceeds
from sale of aircraft
|
|
126,503
|
|
|
81,867
|
|
Payment
for aircraft improvement
|
|
(6,255)
|
|
|
(7,693)
|
|
Lessor
payments for maintenance
|
|
(13,206)
|
|
|
(2,422)
|
|
Net cash flows
used in investing activities
|
|
(49,154)
|
|
|
(215,660)
|
|
|
|
Six months
ended
Jun. 30, 2015
(Unaudited)
|
|
Six months ended
Jun. 30, 2014
(Unaudited)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Restricted cash and cash
equivalents
|
|
27,242
|
|
|
49,600
|
|
Security deposits
received
|
|
3,815
|
|
|
4,391
|
|
Security deposits
returned
|
|
(6,618)
|
|
|
(1,828)
|
|
Maintenance payment
liability receipts
|
|
42,163
|
|
|
48,191
|
|
Maintenance payment
liability disbursements
|
|
(32,891)
|
|
|
(37,131)
|
|
Proceeds from termination of
interest rate swaps
|
|
23
|
|
|
—
|
|
Debt issuance
costs
|
|
(914)
|
|
|
(242)
|
|
Proceeds from secured
borrowings
|
|
147,277
|
|
|
—
|
|
Repayment of secured
borrowings
|
|
(217,890)
|
|
|
(83,592)
|
|
Dividends
|
|
(20,716)
|
|
|
(20,676)
|
|
Dividend
equivalents
|
|
(644)
|
|
|
(1,044)
|
|
Net cash flows
used in financing activities
|
|
(59,153)
|
|
|
(42,331)
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
(305)
|
|
|
20
|
|
Net increase
(decrease) in cash
|
|
12,660
|
|
|
(151,301)
|
|
Cash at beginning of
period
|
|
337,560
|
|
|
404,472
|
|
Cash at end of
period
|
$
|
350,220
|
|
$
|
253,171
|
|
|
|
|
|
|
|
Supplemental
Disclosure:
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
Interest
|
$
|
70,454
|
|
$
|
59,634
|
|
Taxes
|
|
115
|
|
|
152
|
|
Noncash
Activities:
|
|
|
|
|
|
|
Security deposits applied to
maintenance payment liability and rent receivables
|
|
3,175
|
|
|
820
|
|
Maintenance payment
liability applied to rent receivables
|
|
2,108
|
|
|
—
|
|
Other liabilities applied to
maintenance payment liability and rent receivables
|
|
240
|
|
|
979
|
|
Noncash investing
activities:
|
|
|
|
|
|
|
Aircraft
improvement
|
|
2,765
|
|
|
2,174
|
|
Noncash
activities in connection with purchase of aircraft:
|
|
|
|
|
|
|
Rent
receivable applied
|
|
852
|
|
|
1,480
|
|
Security deposits and maintenance payment liability
assumed
|
|
11,597
|
|
|
16,019
|
|
Other assets applied
|
|
898
|
|
|
550
|
|
Other liabilities assumed
|
|
6,997
|
|
|
--
|
|
Noncash activities in
connection with sale of aircraft:
|
|
|
|
|
|
|
Rent receivable
applied
|
|
695
|
|
|
425
|
|
Security deposits and
maintenance payment liability transferred
|
|
6,116
|
|
|
8,678
|
|
Refundable deposits
applied
|
|
2,250
|
|
|
2,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLY Leasing
Limited
|
|
Reconciliation of
Non-GAAP Measures
|
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three months
ended
Jun. 30, 2015
(Unaudited)
|
Three months
ended
Jun. 30, 2014
(Unaudited)
|
Six months
ended
Jun. 30,
2015
(Unaudited)
|
Six months
ended
Jun. 30,
2014
(Unaudited)
|
|
Net income
(loss)
|
$ (58,255)
|
$ 21,674
|
$ (40,989)
|
$ 25,237
|
|
Adjustments:
|
|
|
|
|
|
Aircraft
impairment
|
65,398
|
—
|
65,398
|
—
|
|
Amortization of debt discounts and loan issue costs
|
2,847
|
3,097
|
5,957
|
6,239
|
|
Amortization of lease premiums, discounts and other
|
602
|
644
|
1,321
|
1,405
|
|
Amortization of fair value adjustments recorded in purchase
accounting
|
899
|
1,602
|
2,136
|
3,531
|
|
Net
(gain) loss on debt modification and extinguishment
|
2,119
|
(4,010)
|
6,169
|
(3,995)
|
|
Non-cash
share based compensation
|
43
|
20
|
195
|
(36)
|
|
Unrealized foreign exchange (gain) loss
|
910
|
13
|
(760)
|
(20)
|
|
Deferred
income taxes
|
(6,841)
|
2,849
|
(4,815)
|
3,483
|
|
Ineffective, dedesignated and terminated derivatives
|
1,756
|
97
|
1,492
|
32
|
|
Adjusted Net
Income
|
$
9,478
|
$
25,986
|
$
36,104
|
$ 35,876
|
|
Average
Shareholders' Equity
|
$ 729,033
|
$ 743,314
|
$ 728,627
|
$ 747,439
|
|
Adjusted Return on
Equity
|
5.2%
|
14.0%
|
9.9%
|
9.6%
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
41,456,784
|
41,446,070
|
41,444,957
|
41,420,045
|
|
Adjusted Net
Income per share
|
$
0.23
|
$
0.63
|
$
0.87
|
$
0.87
|
|
|
|
|
|
|
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) gain and losses
from debt modification and extinguishment; (v) non-cash share-based
compensation; (vi) unrealized foreign exchange gains and losses;
(vii) deferred income taxes; and (viii) the ineffective portion and
charges associated with cash flow hedges. 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 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 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.
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SOURCE FLY Leasing Limited