FLY Leasing Reports Third Quarter 2014 Results

DUBLIN, Nov. 13, 2014 /PRNewswire/ -- 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 of 2014.

Third Quarter 2014 Highlights

• Net income of $15.4 million, $0.37 per share
• Total revenues of $105.5 million, an increase of 33%
• Acquired five aircraft for more than $350 million, achieving year-to-date growth of 15%    
• Acquisition pipeline of $374 million
• Declared 28^th consecutive quarterly dividend on October 9^th ($0.25 per share)

"FLY had another strong quarter, with fleet utilization of 100% and revenue growth of more than 30%," said Colm Barrington, FLY's CEO.  "We have grown our fleet to 121 aircraft with the acquisition of five aircraft in the third quarter, maintaining our average fleet age at just over eight years and increasing our average lease term to approximately five years."

"FLY is continuing its growth trajectory, with about $1 billion of aircraft to be purchased in 2014.  We are on track to beat our 2014 fleet growth target of 15%, and are targeting a further 15% fleet growth in 2015.  Our recent issuance of $400 million of unsecured notes, along with $327 million of remaining capacity in our acquisition facility, provides us with ample resources to fund this program."

"The demand for aircraft from our customers remains strong as worldwide air traffic continues to increase. IATA is reporting a 5.8% growth in world passenger numbers in the eight months through August.  Most airlines continue to report strong profits, with IATA now forecasting global airline profits of $18 billion in 2014 as compared to $10.6 billion last year."

Third Quarter Financial Results

FLY's net income and diluted earnings per share for the third quarter of 2014 were $15.4 million and $0.37 compared to $0.3 million and $0.00 in the same period in 2013.

Total revenues increased 33% to $105.5 million.  Operating lease rental revenue for the third quarter of 2014 was $105.1 million compared to $78.4 million for the same period in the previous year, an increase of 34%.  The increase was driven by the larger portfolio and improved utilization.  The third quarter 2014 results include $14.2 million in end of lease income, compared to $17,000 in the third quarter of 2013. 

FLY's net income and diluted earnings per share for the nine months ended September 30, 2014 were $40.6 million and $0.95 compared to $39.1 million and $1.20 for the same period in 2013. For 2014, end of lease income was $18.0 million and gains on aircraft sales totaled $18.9 million. The 2013 results included $47.6 million in end of lease income and $6.3 million in gains on aircraft sales. 

Adjusted Net Income

Adjusted Net Income was $16.5 million for the third quarter of 2014 compared to $2.7 million in the same period in the previous year.  On a per share basis, Adjusted Net Income was $0.40 in the third quarter of 2014 compared to $0.07 for the same period in the previous year.  For the nine months ended September 30, 2014, Adjusted Net Income was $40.4 million, or $0.98 per share, compared to $52.5 million and $1.65 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 9, 2014, FLY declared a dividend of $0.25 per share in respect of the third quarter of 2014. This dividend will be paid on November 20, 2014 to shareholders of record on October 31, 2014. 

Financial Position

At September 30, 2014, FLY's total assets were $3.7 billion, including flight equipment with a net book value of $3.5 billion. The total cash balance at September 30, 2014 was $212.8 million, of which $81.3 million was unrestricted. Neither of these figures includes approximately $400 million that was raised in FLY's recent public offering of unsecured notes, which closed on October 3, 2014.  In addition, there is $327 million available under FLY's acquisition facility which may be used to fund aircraft purchases.  

The total cash balance at December 31, 2013 was $579.3 million, of which $404.5 million was unrestricted.

Aircraft Portfolio

At September 30, 2014, all of FLY's 121 aircraft, as shown in the table below, were on lease to 67 airlines in 37 countries.

At September 30, 2014, the average age of FLY's portfolio was 8.2 years weighted by the net book value of each aircraft. The average remaining lease term was 4.9 years, also weighted by net book value. At September 30, 2014, FLY's leases were generating annualized revenues of approximately $412 million. FLY's lease utilization factor was 100% for the third quarter of 2014 and has now reached 100% for the nine months ended September 30, 2014.

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 13, 2014.  Participants should call +1-253-237-1145 (International) or 800-535-7056 (North America) and enter confirmation code 14024425 or ask an operator for the FLY Leasing earnings call. An earnings call presentation will also be available on FLY's website at www.flyleasing.com. 

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 14024425. The replay recording will be available until November 23, 2014.  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. Further information on the factors and risks that may affect our 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
[email protected]

FLY defines Adjusted Net Income as net income plus or minus the after-tax impacts of the ineffective portion of cash flow hedges, net gains and losses on extinguishment of debt, non-cash share-based compensation, and adjustments related to the GAAM portfolio acquisition comprised of amortization of fair value adjustments recorded in purchase accounting. Management believes that Adjusted Net Income provides information that is useful in evaluating the operating performance of FLY's business and facilitates period-over-period comparisons without regard to gains and losses related to refinancing activity, and share based compensation expense; and the impacts of fair-value adjustments of debt, leases and derivative instruments that FLY assumed in connection with its acquisition of the GAAM portfolio.

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, this measure excludes certain cash items, including principal payments on debt and therefore 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. 

Adjusted Net Income and Adjusted Net Income Plus Depreciation and Amortization should be considered as supplements to, and not as a substitute for, net income and 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, including other companies in its industry.

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SOURCE FLY Leasing Limited