FLY Leasing Reports Second Quarter 2013 Financial Results

          FLY Leasing Reports Second Quarter 2013 Financial Results

PR Newswire

DUBLIN, Aug. 1, 2013

DUBLIN, Aug. 1, 2013 /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 2013.

(Logo: http://photos.prnewswire.com/prnh/20130709/SF44539LOGO)

Second Quarter 2013 Highlights

  +Adjusted Net Income of $11.2 million, $0.40 per share
  +Net income of $5.9 million, $0.20 per share
  +Added three new Boeing 737-800 aircraft
  +Re-priced $380 million term loan, resulting in annual interest savings of
    $4.7 million
  +Declared 23^rd consecutive quarterly dividend on July 15^th ($0.22 per
    share)

"We have grown the fleet by $330 million so far this year and expect that FLY
will exceed the high end of our previously announced 2013 growth target of
$500 million," said Colm Barrington, CEO of FLY. "With our current acquisition
pipeline, the expansion of our Acquisition Facility up to $450 million and the
proceeds from our $173 million equity capital raise, we are well-positioned to
continue executing on our strategic growth plan. We have identified additional
acquisition opportunities to deploy the recently raised capital in a manner
that is accretive to our EPS, our cash flow per share and shareholders' equity
over the long term," said Colm Barrington.

"Three new B737-800s were added in the second quarter and since quarter end we
have added two more B737-800s and a new B777-300ER. We have commitments to
purchase additional B737-800s and a new B787-800 in the third and fourth
quarters," added Barrington.

Second Quarter Financial Results

FLY's net income and diluted earnings per share for the second quarter of 2013
were $5.9 million and $0.20 per share compared to $25.7 million and $0.99 per
share in the same period of 2012. The decline in net income is the result of a
decline in operating lease revenue, gains from aircraft sales during the
second quarter of 2012 and expenses associated with delivering aircraft to new
lessees, partially offset by a reduction of interest expense as a result of
de-leveraging. The decline in operating lease revenue is primarily due to
off-lease aircraft, sale of aircraft which contributed to revenue in Q2 2012
but were subsequently sold and re-lease of aircraft at lower rental rates.

Net income and diluted earnings per share for the six months ended June 30,
2013 were $38.8 million and $1.35 per share compared to $46.1 million and
$1.77 per share for the six months ended June 30, 2012.

Adjusted Net Income

Adjusted Net Income was $11.2 million for the second quarter of 2013 compared
to $30.9 million in the same period in the previous year. On a per share
basis, Adjusted Net Income was $0.40 in the second quarter of 2013 compared to
$1.19 for the same period in the previous year. For the six-months ended June
30, 2013, Adjusted Net Income was $49.8 million, or $1.76 per share compared
to $57.7 million and $2.23 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 July 15, 2013, FLY declared a dividend of $0.22 per share in respect of the
second quarter of 2013. This dividend will be paid on August 20, 2013 to
shareholders of record on July 31, 2013.

Financial Position

At June 30, 2013, FLY's total assets were $3.0 billion, including flight
equipment with a net book value of $2.6 billion. Restricted and unrestricted
cash at June 30, 2013 totaled $296.1 million, of which $139.3 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 $173.1 million.

FLY's net leverage, defined as the ratio of net debt to total shareholders'
equity was 3.3x at June 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.

Aircraft Portfolio

At June 30, 2013, FLY's 103 aircraft were on lease to 54 airlines in 31
countries. The table below shows the aircraft in FLY's portfolio on June 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 Jun 30, Dec 31,
             2013    2012
Airbus A319  19      19
Airbus A320  26      27
Airbus A330  1       1
Airbus A340  3       3
Boeing 717   -       6
Boeing 737   41      40
Boeing 747   1       1
Boeing 757   11      11
Boeing 767   1       1
 Total    103     109

At June 30, 2013, the average age of FLY's portfolio was 9.4 years weighted by
the net book value of each aircraft. The average remaining lease term was 3.7
years, also weighted by net book value. At June 30, 2013, the leases were
generating annualized revenues of approximately $310 million. FLY's lease
utilization factor was 94% for the ^ second quarter of 2013 and for the six
months ended June 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, August 1, 2013.
Participants should call +1-706-758-4339 (International) or 877-309-0213
(North America) and enter confirmation code 98624396 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 98624396. The replay
recording will be available until August 8, 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.

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)
                                                    Six months     Six months
                          Three months Three months
                          ended        ended        ended          ended

                          June 30,    June 30,     June 30, 2013 June 30,
                          2013         2012                        2012
                          (Unaudited)  (Unaudited)  (Unaudited)
                                                                   (Unaudited)
Revenues
 Operating lease        $  88,840   $  98,935   $ 196,214     $  201,357
revenue
 Equity earnings from
unconsolidated joint      481          2,273        903            4,128
ventures
 Gain on sale of        -            8,489        6,451          8,489
aircraft
 Interest and other     1,217        1,213        1,335          1,443
income
Total revenues            90,538       110,910      204,903        215,417
Expenses
 Depreciation           35,207       34,318       69,743         68,493
 Interest expense       29,164       36,628       60,185         73,650
 Debt extinguishment    2,140        -            2,140          -
costs
 Selling, general and   9,554        9,361        19,258         18,778
administrative
 Ineffective,
dedesignated and          (792)        (1,208)      (860)          (1,227)
terminated derivatives
 Maintenance and other  8,534        1,782        9,924          2,660
costs
Total expenses            83,807       80,881       160,390        162,354
Net income before
provision for income      6,731        30,029       44,513         53,063
taxes
 Provision for income   816          4,300        5,753          6,947
taxes
Net income                $  5,915   $  25,729   $ 38,760      $  46,116
Weighted average number
of shares
- Basic                 28,150,215   25,769,115   28,109,929     25,741,559
- Diluted               28,260,475   25,924,964   28,211,847     25,885,182
Earnings per share
- Basic                 $  0.20     $  1.00     $  1.36       $  1.78
- Diluted               $ 0.20      $ 0.99      $ 1.35        $ 1.77
Dividends declared and    $  0.22     $  0.20     $  0.44       $  0.40
paid per share

FLY Leasing Limited
Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                  June 30,
                                                              Dec. 31, 2012
                                                  2013
                                                              (Audited)
                                                  (Unaudited)
Assets
 Cash and cash equivalents                      $ 139,304  $  163,124
 Restricted cash and cash equivalents           156,777     137,457
 Rent receivables                               2,143       3,124
 Investment in unconsolidated joint ventures    7,211       6,308
 Flight equipment held for operating leases,    2,620,545   2,616,864
net
 Deferred tax asset, net                        3,022       9,450
 Fair market value of derivative asset          8,101       319
 Other assets, net                              31,785      32,026
Total assets                                      $ 2,968,888 $ 2,968,672
Liabilities
 Accounts payable and accrued liabilities       21,058      15,662
 Rentals received in advance                    15,107      14,402
 Payable to related parties                     2,164       2,789
 Security deposits                              48,711      47,474
 Maintenance payment liabilities                213,714     225,733
 Secured borrowings, net                        2,030,229   2,052,412
 Fair market value of derivative liabilities    28,665      48,967
 Other liabilities                              30,626      29,231
Total liabilities                                 2,390,274   2,436,670
Shareholders' equity
Common shares, $0.001 par value, 499,999,900
shares authorized; 28,163,482 and 28,040,305      28          28
shares issued and outstanding at June 30, 2013
and December 31, 2012, respectively
 Manager shares, $0.001 par value; 100 shares   −           −
authorized, issued and outstanding
 Additional paid in capital                     485,207     482,733
 Retained earnings                              108,887     83,138
 Accumulated other comprehensive loss, net      (15,508)    (33,897)
Total shareholders' equity                        578,614     532,002
Total liabilities and shareholders' equity        $ 2,968,888 $ 2,968,672

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 Three months Six months  Six months
                             ended        ended        ended       ended

                             June 30,     June 30,     June 30,   June 30,
                             2013         2012         2013        2012
                             (Unaudited)  (Unaudited)  (Unaudited) (Unaudited)
Net Income                   $  5,915    $  25,729   $  38,760  $  46,116
Add (less):
 Ineffective portion of    (792)        (1,208)      (860)       (1,227)
cash flow hedges
 Debt extinguishment costs 2,140        -            2,140       -
  Non-cash share based       668          804          2,474       1,646
  compensation
  Adjustments related to
  GAAM Portfolio
  acquisition:
   Amortization of
  fair value adjustments     3,534        6,130        8,056       12,552
  recorded in purchase
  accounting
  Income tax effects         (230)        (581)        (796)       (1,421)
Adjusted Net Income          $  11,235   $  30,874   $  49,774  $  57,666
Weighted average diluted     28,260,475   25,924,964   28,211,847  25,885,182
shares outstanding
Adjusted Net Income per      $  0.40     $  1.19     $  1.76    $  2.23
share

Adjusted Net Income Plus Depreciation and Amortization, a Non-GAAP Financial
Measure, to Net Income
(DOLLARS IN THOUSANDS)
                                                      Six months   Six months
                          Three months  Three months
                          ended         ended         ended        ended

                          June 30,      June 30,      June 30,    June 30,
                          2013          2012          2013         2012
                          (Unaudited)   (Unaudited)
                                                      (Unaudited)  (Unaudited)
Adjusted Net Income       $ 11,235     $  30,874    $  49,774   $  57,666
Add:
 Depreciation           35,207        34,318        69,743       68,493
 Other amortization     5,517         3,661         10,463       7,446
 Provision for deferred 1,081         4,362         5,721        7,381
income taxes
Adjusted Net Income Plus
Depreciation and          $  53,040    $  73,215    $  135,701  $  140,986
Amortization

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.

SOURCE FLY Leasing Limited

Website: http://www.flyleasing.com
 
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