FLY Leasing Reports Second Quarter 2013 Financial Results

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.

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 23rd consecutive quarterly dividend on July 15th ($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.

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.