EX-99.1 2 d623188dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

FLY LEASING REPORTS THIRD QUARTER 2013 FINANCIAL RESULTS

Dublin, Ireland, November 7, 2013 – FLY Leasing Limited (NYSE: FLY) (“FLY”), a global lessor of modern, fuel-efficient commercial jet aircraft, today announced its financial results for the third quarter and first nine months of 2013.

Third Quarter 2013 Highlights

 

  •   Adjusted Net Income of $2.7 million, $0.07 per share

 

  •   Net income of $304,000

 

  •   Added four Boeing 737-800 aircraft

 

  •   Added a new Boeing 777-300ER aircraft

 

  •   Raised $172.6 million of new equity capital

 

  •   Declared 24th consecutive quarterly dividend on October 14th ($0.22 per share)

 

  •   Dividend to be increased to $0.25 per share in 2014

Nine Month Highlights

 

  •   Adjusted Net Income of $52.5 million, $1.65 per share

 

  •   Net income of $39.1 million, $1.20 per share

 

  •   Exceeded fleet growth targets for 2013

 

  •   Increased unrestricted cash to over $200 million

 

  •   Paid three quarterly dividends totaling $0.66 per share

“During the third quarter we added five aircraft, increasing our portfolio to 107 aircraft at quarter end,” said Colm Barrington, CEO of FLY. So far in the fourth quarter we have added two more aircraft, including a new Boeing 787 on a long-term lease to a top credit airline. This year we have added aircraft worth more than $560 million to our fleet, achieving our growth target for the year and putting us on track to add more than $600 million worth of aircraft by year end. FLY has the capital to maintain this strong growth in 2014 and we continue to see attractive acquisition opportunities.”

“All of our aircraft are now on lease or committed to leases,” added Barrington. “The global airline industry is strong with air traffic and airline load factors at or near all-time highs. Demand for leased aircraft remains strong and we are seeing improvements in lease rates. As we look ahead to 2014, FLY is well positioned to benefit from its strong financial position, its growing fleet and improving industry conditions. As a result, FLY’s board has authorized a 14% increase in the dividend to be declared in respect of the fourth quarter of 2013. FLY remains committed to returning capital to shareholders.”

Third Quarter Financial Results

FLY’s net income and diluted earnings per share for the third quarter of 2013 were $304,000 and $0.00 per share compared to a loss of $29.4 million and a loss of $1.15 per share in the same period of 2012. Operating lease revenue decreased from $84.4 million for the third quarter of 2012 to $78.4 million for the third quarter of 2013, primarily due to a decrease in end of lease income from $5.8 million in 2012 to $0 in 2013. The loss in the third quarter of 2012 included expenses of $32.3 million associated with termination of interest rate swaps in connection with refinancing FLY’s original Acquisition Facility.

Net income and diluted earnings per share for the nine months ended September 30, 2013 were $39.1 million and $1.20 per share compared to $16.7 million and $0.63 per share for the nine months ended September 30, 2012.

Adjusted Net Income

Adjusted Net Income was $2.7 million for the third quarter of 2013 compared to $5.4 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $0.07 in the third quarter of 2013 compared to $0.21 for the same period in the previous year. For the nine months ended September 30, 2013, Adjusted Net Income was $52.5 million, or $1.65 per share compared to $63.1 million and $2.43 per share 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

On October 14, 2013, FLY declared a dividend of $0.22 per share in respect of the third quarter of 2013. This dividend will be paid on November 19, 2013 to shareholders of record on October 30, 2013. FLY’s board has authorized an increase in the dividend to be declared in respect of the fourth quarter of 2013 to $0.25.

Financial Position

At September 30, 2013, FLY’s total assets were $3.3 billion, including flight equipment with a net book value of $2.9 billion. Total cash at September 30, 2013 was $362.9 million, of which $207.0 million was unrestricted. This compares to total cash of $300.6 million at December 31, 2012, of which $163.1 million was unrestricted.

In July, FLY completed an underwritten public offering of 13,142,856 common shares in the form of ADSs at a price of $14.00 per ADS, generating net proceeds of approximately $172.6 million.

FLY’s net leverage ratio, defined as the ratio of net debt to total shareholders’ equity was 2.7x at September 30, 2013 compared to 3.6x at December 31, 2012. Net debt is defined as book value of secured borrowings, less unrestricted cash and cash equivalents.

 

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Aircraft Portfolio

At September 30, 2013, FLY’s 107 aircraft were on lease to 56 airlines in 32 countries. The table below shows the aircraft in FLY’s portfolio on September 30, 2013 and December 31, 2012. The table does not include the four B767 aircraft owned by a joint venture in which FLY has a 57% interest.

 

Portfolio at    Sep 30,
2013		      Dec 31,
2012		  

Airbus A319

      19         19   

Airbus A320

      26         27   

Airbus A330

      1         1   

Airbus A340

      3         3   

Boeing 717

      —           6   

Boeing 737

      44         40   

Boeing 747

      1         1   

Boeing 757

      11         11   

Boeing 767

      1         1   

Boeing 777

      1         —     
  

 

 

     

 

 

  

Total

      107         109   
  

 

 

     

 

 

  

At September 30, 2013, the average age of FLY’s portfolio was 8.8 years weighted by the net book value of each aircraft. The average remaining lease term was 4.0 years, also weighted by net book value. At September 30, 2013, the leases were generating annualized revenues of approximately $345 million. FLY’s lease utilization factor was 97% for the third quarter of 2013 and was 95% for the nine months ended September 30, 2013.

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, November 7, 2013. Participants should call +1-706-758-4339 (International) or 877-309-0213 (North America) and enter confirmation code 68512691 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 68512691. The replay recording will be available until November 14, 2013.

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.

 

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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

West Pier                 

Dun Laoghaire        

Co Dublin, Ireland  

 

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FLY Leasing Limited

Consolidated Statements of Income

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

 

     Three months
ended
Sept. 30,
2013
(Unaudited)		     Three months
ended
Sept. 30,
2012
(Unaudited)		     Nine months
ended
Sept. 30,
2013
(Unaudited)		     Nine months
ended
Sept. 30,
2012
(Unaudited)		  

Revenues

         

Operating lease revenue

    $ 78,369      $ 84,443      $ 274,583      $ 285,800   

Equity earnings from unconsolidated subsidiaries

      474        1,852        1,377        5,980   

(Loss) Gain on sale of aircraft

      (47 )      —          6,277        8,489   

Interest and other income

      319        113        1,781        1,556   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      79,115        86,408        284,018        301,825   
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses

         

Depreciation

      36,908        34,302        106,651        102,795   

Interest expense

      30,016        36,045        90,201        109,695   

Debt extinguishment costs

      564        —          2,704        —     

Selling, general and administrative

      8,105        11,435        27,363        30,213   

Ineffective, dedesignated and terminated derivatives

      (160 )      32,580        (1,020 )      31,353   

Maintenance and other costs

      2,563        3,478        12,487        6,138   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total expenses

      77,996        117,840        238,386        280,194   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) before provision (benefit) for income taxes

      1,119        (31,432 )      45,632        21,631   

Provision (benefit) for income taxes

      815        (1,993 )      6,568        4,954   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 304      $ (29,439 )    $ 39,064      $ 16,677   
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of shares

         

- Basic

      38,797,022        25,769,115        31,711,440        25,750,811   

- Diluted

      38,921,962        25,769,115        31,821,118        25,915,110   

Earnings (loss) per share

         

- Basic

    $ 0.00      $ (1.15 )    $ 1.21      $ 0.63   

- Diluted

    $ 0.00      $ (1.15 )    $ 1.20      $ 0.63   

Dividends declared and paid per share

    $ 0.22      $ 0.22      $ 0.66      $ 0.62   

 

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FLY Leasing Limited

Consolidated Balance Sheets

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

 

     Sept. 30,
2013
(Unaudited)		     Dec. 31,
2012
(Audited)		  

Assets

     

Cash and cash equivalents

    $ 206,966      $ 163,124   

Restricted cash and cash equivalents

      155,897        137,457   

Rent receivables

      3,234        3,124   

Investment in unconsolidated subsidiaries

      7,686        6,308   

Flight equipment held for operating lease, net

      2,868,678        2,616,864   

Deferred tax asset, net

      1,595        9,450   

Fair market value of derivative assets

      4,902        319   

Other assets, net

      36,616        32,026   
  

 

 

    

 

 

  

Total assets

    $ 3,285,574      $ 2,968,672   
  

 

 

    

 

 

  

Liabilities

     

Accounts payable and accrued liabilities

      17,405        15,662   

Rentals received in advance

      16,084        14,402   

Payable to related parties

      3,101        2,789   

Security deposits

      47,624        47,474   

Maintenance payment liability

      225,230        225,733   

Secured borrowings, net

      2,175,998        2,052,412   

Fair market value of derivative liabilities

      30,649        48,967   

Other liabilities

      32,092        29,231   
  

 

 

    

 

 

  

Total liabilities

      2,548,183        2,436,670   
  

 

 

    

 

 

  

Shareholders’ equity

     

Common shares, $0.001 par value, 499,999,900 shares authorized; 41,306,338 and 28,040,305 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively

      41        28   

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

      —          —     

Additional paid in capital

      657,600        482,733   

Retained earnings

      99,952        83,138   

Accumulated other comprehensive loss, net

      (20,202 )      (33,897 ) 
  

 

 

    

 

 

  

Total shareholders’ equity

      737,391        532,002   
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 3,285,574      $ 2,968,672   
  

 

 

    

 

 

  

 

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FLY Leasing Limited

Reconciliation of Adjusted Net Income, a Non-GAAP Financial Measure, to Net Income

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

 

     Three months
ended
Sept. 30,
2013
(Unaudited)		     Three months
ended
Sept. 30,
2012
(Unaudited)		     Nine months
ended
Sept. 30,
2013
(Unaudited)		     Nine months
ended
Sept. 30,
2012
(Unaudited)		  

Net Income (loss)

    $ 304      $ (29,439 )    $ 39,064      $ 16,677   

Add (less):

         

Ineffective portion of cash flow hedges

      (160 )      32,580        (1,020 )      31,353   

Debt extinguishment costs

      564        —          2,704        —     

Non-cash share based compensation

      (189 )      1,458        2,285        3,104   

Adjustments related to GAAM Portfolio acquisition:

         

Amortization of fair value adjustments recorded in purchase accounting

      2,899        5,606        10,955        18,158   

Income tax effects

      (712 )      (4,801 )      (1,508 )      (6,222 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Net Income

    $ 2,706      $ 5,404      $ 52,480      $ 63,070   
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average diluted shares outstanding

      38,921,962        25,960,109        31,821,118        25,915,110   
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Net Income per share

    $ 0.07      $ 0.21      $ 1.65      $ 2.43   
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Net Income Plus Depreciation and Amortization, a Non-GAAP Financial Measure, to Net Income

(DOLLARS IN THOUSANDS)

 

     Three months
ended
Sept. 30,
2013
(Unaudited)		      Three months
ended
Sept. 30,
2012
(Unaudited)		      Nine months
ended
Sept. 30,
2013
(Unaudited)		      Nine months
ended
Sept. 30,
2012
(Unaudited)		  

Adjusted Net Income

    $ 2,706       $ 5,404       $ 52,480       $ 63,070   

Add:

            

Depreciation

      36,908         34,302         106,651         102,795   

Other amortization

      6,428         7,427         16,892         14,873   

Provision for deferred income taxes

      2,833         2,014         8,554         9,395   
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income Plus Depreciation and Amortization

    $ 48,875       $ 49,147       $ 184,577       $ 190,133   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

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FLY defines Adjusted Net Income as net income plus or minus the after-tax impacts of the ineffective portion of cash flow hedges, debt extinguishment costs, non-cash share-based compensation, and adjustments related to the GAAM portfolio acquisition comprised of amortization of fair value adjustments recorded in purchase accounting. FLY believes that Adjusted Net Income provides useful information about operating performance and period over period comparisons. It also provides additional information that is useful for evaluating the underlying operating performance of our business without regard to the impacts of fair-value adjustments of debt that the company has assumed, acquired leases and derivative instruments and other non-recurring items of income and expense affecting current period results. Adjusted Net Income should be used as a supplement to and not as a substitute for financial measures determined in accordance with Accounting Principles Generally Accepted in the United States.

Adjusted Net Income Plus Depreciation and Amortization is a cash flow measure that provides investors with an additional measure for evaluating FLY’s ongoing cash earnings, from which capital investments are made, debt is serviced and dividends are paid. However, adjusted net income plus depreciation and amortization excludes certain positive and negative cash items, including principal payments, and has certain important limitations as an indicator of FLY’s ability to pay dividends and reinvest in its business. Management uses Adjusted Net Income and Adjusted Net Income Plus Depreciation and Amortization as a measure for assessing FLY’s performance. These measures should be considered in addition to, not as a substitute for net income or other financial measures determined in accordance with GAAP. Finally, FLY’s definitions may be different than those used by other companies.

 

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