Fly Leasing Reports Second Quarter 2020 Financial Results

DUBLIN, Aug. 13, 2020 /PRNewswire/ -- Fly Leasing Limited (NYSE: FLY) ("FLY"), a global leader in aircraft leasing, today announced its financial results for the second quarter of 2020.

FLY Leasing Limited logo. (PRNewsFoto/FLY Leasing Limited)

Highlights

  • Net income of $9.6 million, $0.32 per share
  • Adjusted Net Income of $11.3 million, $0.37 per share
  • $29.46 book value per share at quarter end, a 21% increase since June 30, 2019
  • $289.0 million of unrestricted cash and cash equivalents
  • $597.9 million net book value of unencumbered assets
  • 2.1x net debt to equity

"Our second quarter results reflect the challenges of the COVID-19 pandemic but FLY remains in a strong position to meet its financial and operating commitments with unrestricted cash of $289 million and nearly $600 million of unencumbered aircraft," said Colm Barrington, Chief Executive Officer of FLY. "FLY is reporting a record low net debt to equity ratio of 2.1x at quarter end and 21% growth in book value per share from a year ago to $29.46. FLY does not have any orders for aircraft or other capital commitments and has no significant near-term refinancing requirements."

"We are working closely with our airline customers and now expect to agree to defer rents representing approximately 20% of contracted rental revenue for the second half of the year," said Barrington. "Meanwhile, several of our lessees have received support from their governments, which is helping them to meet their payment obligations. FLY also has the benefit of BBAM's decades of experience and expertise in navigating industry cycles, which is truly an invaluable resource during this time."

Financial Results

FLY is reporting net income of $9.6 million, or $0.32 per share, for the second quarter of 2020. This compares to net income of $54.1 million, or $1.68 per share, for the same period in 2019.

Net income for the six months ended June 30, 2020 was $47.7 million, or $1.56 per share, compared to net income of $99.0 million, or $3.06 per share, for the six months ended June 30, 2019.

Adjusted Net Income

Adjusted Net Income was $11.3 million for the second quarter of 2020, compared to $61.9 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $0.37 in the second quarter of 2020, compared to $1.92 for the second quarter of 2019.

For the six months ended June 30, 2020, Adjusted Net Income was $54.9 million, or $1.79 per share, compared to $109.0 million, or $3.37 per share, for the same period last year.

A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.

Financial Position

At June 30, 2020, FLY's total assets were $3.5 billion, including investment in flight equipment totaling $3.0 billion. Total cash at June 30, 2020 was $309.3 million, of which $289.0 million was unrestricted. The book value per share at June 30, 2020 was $29.46, a 21% increase since June 30, 2019. At June 30, 2020, FLY's net debt to equity ratio was 2.1x, a decrease from 2.3x at December 31, 2019.

Aircraft Portfolio

At June 30, 2020, FLY had 86 aircraft and seven engines in its portfolio. FLY's aircraft and engines are on lease to 41 airlines in 25 countries. The table below does not include the engines.      

Portfolio at

Jun. 30, 2020

Dec. 31, 2019


Number

% of Net
Book Value

Number

% of Net
Book Value

Airbus A320ceo Family

33

28%

34

28%

Airbus A320neo Family

1

2%

1

2%

Airbus A330

3

6%

3

6%

Boeing 737NG

40

37%

42

37%

Boeing 737 MAX

2

3%

2

3%

Boeing 757-SF

1

<1%

1

<1%

Boeing 777-LRF

2

10%

2

10%

Boeing 787

4

14%

4

14%

      Total(1)

86

100%

89

100%

(1) Includes six aircraft classified as held for sale as of December 31, 2019. No aircraft were held for sale as of June 30, 2020.

     

At June 30, 2020, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 8.0 years. The average remaining lease term was 4.9 years, also weighted by net book value. At June 30, 2020, FLY's portfolio was generating annualized rental revenue of approximately $318 million.

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 13, 2020. Participants should call +1 (409) 220-9381 (International) or (866) 438-0730 (North America) and enter confirmation code 7868869. A live webcast with slide presentation will be available on the Events and Presentations page in the Investor Relations section of FLY's website at www.flyleasing.com. A webcast replay will be available on the company's website for one year.

About FLY

FLY is a global aircraft leasing company with a fleet of modern, high-demand, and fuel efficient commercial jet aircraft. FLY leases its aircraft under multi-year lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM LP, a worldwide leader in aircraft lease management and financing. For more information about FLY, please visit our website at www.flyleasing.com.

Non-GAAP Financial Measures

FLY provides all financial information in accordance with Generally Accepted Accounting Principles in the United States (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release, and on our conference call, certain non-GAAP financial measures, including Adjusted Net Income and Adjusted Return on Equity.  In calculating these non-GAAP financial measures, we have excluded certain amounts, as detailed in the reconciliation below.

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, operations 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, and the risk that FLY may be unable to achieve its portfolio growth expectations, or to reap the benefits of such growth. Additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks. Further information on the factors and risks that may affect FLY's 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.

 

Fly Leasing Limited

Consolidated Statements of Income

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Three months ended Jun. 30,

Six months ended Jun. 30,


2020 
(Unaudited)

2019
(Unaudited)

2020
(Unaudited)

2019
(Unaudited)

Revenues





Operating lease rental revenue

$         79,843

$       101,108

$      165,378

$      206,436

End of lease income

227

28,823

2,654

30,387

Amortization of lease incentives

(703)

(1,319)

(1,317)

(2,951)

Amortization of lease discounts and other

(250)

11

(158)

3

Operating lease revenue

79,117

128,623

166,557

233,875

Finance lease revenue

141

156

286

316

Gain on sale of aircraft

16,078

31,717

43,698

Interest and other income

704

2,176

2,957

3,847

Total revenues

79,962

147,033

201,517

281,736

Expenses





Depreciation

31,977

37,303

63,608

74,888

Interest expense

25,284

35,439

52,439

73,618

Selling, general and administrative

7,093

9,438

14,757

18,160

Provision for uncollectible operating lease receivables

2,000

2,000

Loss on derivatives

65

255

572

272

Fair value loss on marketable securities

1,083

10,495

Loss on extinguishment of debt

1,541

850

3,710

Maintenance and other costs

1,032

1,625

2,216

2,223

Total expenses

68,534

85,601

146,937

172,871

Net income before provision for income taxes

11,428

61,432

54,580

108,865

Provision for income taxes

1,822

7,382

6,902

9,850

Net income

$           9,606

$         54,050

$        47,678

$        99,015

Weighted average number of shares





-  Basic

30,481,069

32,053,830

30,623,455

32,341,674

-  Diluted

30,481,069

32,187,115

30,623,455

32,396,717

Earnings per share





-  Basic

$             0.32

$             1.69

$             1.56

$             3.06

-  Diluted

$             0.32

$             1.68

$             1.56

$             3.06

 

 

Fly Leasing Limited

Consolidated Balance Sheets

(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE DATA)



Jun. 30,
 2020
(
Unaudited)

Dec. 31,
2019
(
Audited)

Assets



Cash and cash equivalents

$           288,980

$         285,565

Restricted cash and cash equivalents

20,367

52,738

Rent receivables, net

58,052

14,264

Investment in finance lease, net

11,026

11,639

Flight equipment held for sale, net

144,119

Flight equipment held for operating lease, net

2,730,949

2,720,000

Maintenance rights

285,869

290,958

Deferred tax asset, net

15,204

11,675

Fair value of derivative assets

6,285

4,824

Other assets, net

118,194

129,377

Total assets

$        3,534,926

$      3,665,159

Liabilities



Accounts payable and accrued liabilities

$             21,681

$            22,746

Rentals received in advance

13,356

16,391

Payable to related parties

3,619

10,077

Security deposits

39,720

40,726

Maintenance payment liability, net

200,354

219,371

Unsecured borrowings, net

620,278

619,407

Secured borrowings, net

1,544,546

1,695,525

Deferred tax liability, net

64,578

57,935

Fair value of derivative liabilities

55,845

27,943

Other liabilities

72,841

76,761

Total liabilities

2,636,818

2,786,882

Shareholders' equity



Common shares, $0.001 par value, 499,999,900 shares authorized; 30,481,069 and 30,898,410 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

31

31

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

Additional paid-in capital

509,738

516,254

Retained earnings

428,070

380,392

Accumulated other comprehensive loss, net

(39,731)

(18,400)

Total shareholders' equity

898,108

878,277

Total liabilities and shareholders' equity

$        3,534,926

$      3,665,159

 

 

Fly Leasing Limited

Consolidated Statements of Cash Flows

(DOLLARS IN THOUSANDS)



Six months ended Jun. 30,


2020
(
Unaudited)

2019
(
Unaudited)

Cash Flows from Operating Activities



Net income

$             47,678

$            99,015

Adjustments to reconcile net income to net cash flows provided by
operating activities:



Gain on sale of aircraft

(31,717)

(43,698)

Depreciation

63,608

74,888

Amortization of debt discounts and debt issuance costs

3,696

5,369

Amortization of lease incentives and other items

1,635

3,324

Provision for uncollectible operating lease receivables

2,000

Fair value loss on marketable securities

10,495

Loss on extinguishment of debt

850

3,710

Provision for deferred income taxes

6,763

9,991

Security deposits and maintenance payment liability recognized into earnings

(2,487)

(26,145)

Cash receipts from maintenance rights

2,725

1,741

Other

252

(113)

Changes in operating assets and liabilities:



Rent receivables

(47,549)

(2,011)

Other assets

3,490

(3,360)

Payable to related parties

(6,458)

2,131

Accounts payable, accrued liabilities and other liabilities

(72)

(2,054)

Net cash flows provided by operating activities

54,909

122,788

Cash Flows from Investing Activities



Purchase of flight equipment

(74,128)

(61,381)

Proceeds from sale of aircraft, net

160,271

410,939

Payments for aircraft improvement

(12,888)

(2,832)

Payments for lessor maintenance obligations

(357)

(1,461)

Other

(890)

(643)

Net cash flows provided by investing activities

72,008

344,622




Six months ended Jun. 30,


2020
(Unaudited)

2019
(Unaudited)

Cash Flows from Financing Activities



Security deposits received

3,305

Security deposits returned

(1,546)

Maintenance payment liability receipts

12,039

33,633

Maintenance payment liability disbursements

(10,109)

(12,738)

Debt extinguishment costs

(20)

(74)

Debt issuance costs

(342)

Repayment of secured borrowings

(154,625)

(325,317)

Shares repurchased

(6,504)

(27,025)

Net cash flows used in financing activities

(155,914)

(333,409)

Effect of exchange rate changes on unrestricted and restricted cash
and cash equivalents

41

(28)

Net (decrease) increase in unrestricted and restricted cash and cash equivalents

(28,956)

133,973

Unrestricted and restricted cash and cash equivalents at beginning of period

338,303

281,080

Unrestricted and restricted cash and cash equivalents at end of period

$             309,347

$       415,053




Reconciliation to Consolidated Balance Sheets:



Cash and cash equivalents

$             288,980

$       351,892

Restricted cash and cash equivalents

20,367

63,161

Unrestricted and restricted cash and cash equivalents

$             309,347

$       415,053









 

 

Fly Leasing Limited

Reconciliation of Non-GAAP Measures

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



Three months ended Jun. 30,

Six months ended Jun. 30,


2020
(Unaudited)

2019
(Unaudited)

2020
(Unaudited)

2019
(Unaudited)

Net income

$         9,606

$       54,050

$       47,678

$       99,015

Adjustments:





Unrealized foreign exchange (gain) loss

56

68

(39)

(104)

Deferred income taxes

1,582

7,519

6,763

9,991

Fair value changes on undesignated derivatives

13

255

494

143

Adjusted Net Income

$       11,257

$       61,892

$       54,896

$     109,045

Average Shareholders' Equity

$     894,172

$     745,783

888,874

731,225

Adjusted Return on Equity

5.0%

33.2%

12.4%

29.8%






Weighted average diluted shares outstanding

30,481,069

32,187,115

30,623,455

32,396,717

Adjusted Net Income per diluted share

$           0.37

$            1.92

$             1.79

$           3.37

 

FLY defines Adjusted Net Income as net income plus or minus (i) unrealized foreign exchange gains and losses; (ii) deferred income taxes; (iii) the fair value changes associated with interest rate derivative contracts that are not accounted for as cash flow hedges; and (iv) non-recurring expenses. The adjustments included within Adjusted Net Income are primarily non-cash or non-recurring items that we consider unrelated to the ongoing performance of our operations. Adjusted Return on Equity is calculated by dividing Adjusted Net Income by average shareholders' equity for each period presented. For periods of less than one year, the resulting return is annualized.

FLY uses Adjusted Net Income and Adjusted Return on Equity, in addition to GAAP net income and earnings per share, to assess our core operating performance on a consistent basis from period to period. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash or non-recurring items and certain other items that are not indicative of our overall operating trends. In addition, Adjusted Net Income and Adjusted Return on Equity help us compare our performance to our competitors. These measures should be considered in addition to, and not as substitutes for, net income or other financial measures determined in accordance with GAAP. FLY's definitions may be different than those used by other companies.

Contact:
Matt Dallas
Fly Leasing Limited
+1 203-769-5916
ir@flyleasing.com

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/fly-leasing-reports-second-quarter-2020-financial-results-301111571.html

SOURCE Fly Leasing Limited

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.