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 firstname.lastname@example.org 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
FLY Leasing Reports Second Quarter 2013 Financial Results
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