FLY Leasing Reports First Quarter 2013 Financial Results

DUBLIN, May 2, 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 first quarter of 2013.

First Quarter 2013 Highlights

Adjusted net income of $38.5 million, $1.37 per share
Net income of $32.8 million, $1.15 per share
Sold one A320, six B717s and two B737 Classics for a pre-tax gain of $6.5 million
Reduced financial leverage to 3.2x at quarter end
Declared our 22nd consecutive quarterly dividend on April 15th ($0.22 per share)
In April purchased a new B737-800 on a long lease to an Asian airline
“FLY is reporting another strong quarter, with higher revenues, lower expenses, a reduced debt to equity ratio and a stronger cash position,” said Colm Barrington, CEO of FLY Leasing. “Our higher revenues were positively impacted by end of lease revenues and aircraft sales proceeds. During the quarter we continued our strategy of actively managing our fleet by selling one A320, our six B717s and two B737 Classics for a gain of more than $6 million.”

“In the quarter FLY reduced its debt by more than $70 million while increasing its unrestricted cash to nearly $200 million. As a result we have more than achieved our 3.5x leverage target, with actual net leverage of 3.2x at quarter end. FLY’s net book value exceeded $20 per share at the end of the quarter.”

“Our nearly $200 million of free cash provides us with funds to achieve our growth targets for the year. In April, we purchased a new B737-800 on a long-term lease to an Asian airline. All but one of FLY’s 38 B737s are now Next Generation aircraft.” added Barrington. “In the meantime, forecasts for the global airline industry have become increasingly positive.”

Financial Results

FLY is reporting net income for the first quarter of 2013 of $32.8 million or $1.15 per basic and diluted share. This compares to net income of $20.4 million or $0.78 per basic and diluted share for the same period in 2012. The increase in net income is due to gains recognized from the sale of six Boeing 717 aircraft during the first quarter of 2013 and an increase in end of lease income over the same period in the previous year.

Total revenues were $114.4 million for the 1st quarter of 2013 and include $6.5 million in gains from aircraft sales. This compares to total revenues of $104.5 million in the same period in the previous year. Included within the $107.4 million of operating lease revenue for the first quarter of 2013 is $30.6 million of end of lease income. End of lease income for the same period in the previous year was $15.9 million.

Adjusted Net Income

Adjusted Net Income was $38.5 million for the first quarter of 2013 compared to $26.8 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $1.37 in the first quarter of 2013 compared to $1.04 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 and Share Repurchases

On April 15, 2013, FLY declared a dividend of $0.22 per share in respect of the first quarter of 2013. This dividend will be paid on May 20, 2013 to shareholders of record on April 30, 2013. This is FLY’s 22nd consecutive quarterly dividend.

On May 1, 2013, the Company’s board of directors approved a $30 million share repurchase program expiring in May 2014 to replace the previous program. Under this program, FLY may make share repurchases from time to time in the open market or in privately negotiated transactions. The timing of the repurchases under this program will depend upon a variety of factors, including market conditions, and the program may be suspended or discontinued at any time.

Financial Position

At March 31, 2013, FLY’s total assets were $2.9 billion, including flight equipment with a net book value of $2.5 billion. Cash and cash equivalents at March 31, 2013 totaled $344.7 million, of which $196.7 million was unrestricted. This compares to total cash and cash equivalents of $300.6 million at December 31, 2012, of which $163.1 million was unrestricted.

FLY’s net leverage, defined as the ratio of net debt to total shareholders’ equity was 3.2x at March 31, 2013 compared to 3.6x at December 31, 2012. FLY has surpassed its stated goal of returning net leverage to less than 3.5×. Net debt is defined as book value of secured borrowings, less unrestricted cash and cash equivalents.

Aircraft Portfolio

At March 31, 2013, FLY’s 100 aircraft were on lease to 52 airlines in 32 countries. The table below shows the aircraft in FLY’s portfolio as of March 31, 2013 and December 31, 2012. The table does not include four B767 aircraft owned by a joint venture in which FLY has a 57% interest.

At March 31, 2013, the average age of the portfolio was 9.6 years weighted by the net book value of each aircraft. The average remaining lease term was 2.9 years, also weighted by net book value. At March 31, 2013, FLY’s leases were generating annualized rental revenues of approximately $307 million. For the first quarter of 2013, FLY’s lease utilization factor was 94%.