FLY Leasing has reported a net income of $7.1 million, $0.21 per share, for the first quarter of 2016. This compares to net income of $19.9 million or $0.47 per diluted share for the same period in 2015.
The first quarter 2015 results include $21.9 million of end of lease revenue, whereas there was only $3.2 million of end of lease revenue in the first quarter of 2016. All results for the first quarter of 2015 have been restated as described previously (click here).
FLY’s adjusted net income was $16.2 million for the first quarter of 2016 compared to $30.2 million in the same period in the previous year. On a per share basis, adjusted net income was $0.47 in the first quarter of 2016 compared to $0.73 for the same period in the previous year.
“FLY moves into the second quarter having accomplished several strategic objectives: completing the sale of 45% of our fleet – primarily older aircraft – at gains to book value, repurchasing 19% of our shares at a discount to book value, reducing core SG&A, and completing a new, attractively priced $385 million aircraft acquisition facility,” said Colm Barrington, CEO of FLY. “The company is in a strong position to deliver increased return on equity going forward.”
“We have ample financial capacity for our strategic objectives, including $330 million in unrestricted cash,” added Barrington. “We expect to meet our goal of adding $750 million of aircraft to our fleet this year. The industry conditions remain strong, airline traffic is robust, our fleet is 100% utilized and we continue to see excellent global demand for leased aircraft."
During this period, FLY closed $385 million aircraft acquisition facility, sold ten aircraft generating gross proceeds of $60 million after debt repayment, and has $445 million of aircraft acquisitions scheduled to close in second quarter
During the first quarter, FLY repurchased 2.1 million shares for approximately $25 million. FLY’s board of directors has approved an additional $30 million share repurchase program expiring in March 2017 to replace the previous program.
At March 31, 2016, FLY’s total assets were $3.2 billion, including an investment in flight equipment totaling $2.7 billion. Investment in flight equipment includes $84.6 million of net maintenance right assets. Cash and cash equivalents at March 31, 2016 totaled $428.1 million, of which $329.3 million was unrestricted. In addition, FLY had twelve unencumbered aircraft with an aggregate net book value of $610.2 million at March 31, 2016. The book value per share at March 31, 2016 was $18.83.
At March 31, 2016, FLY’s 79 aircraft were on lease to 43 airlines in 28 countries. The average age of the portfolio was 6.8 years weighted by the net book value, including maintenance rights, of each aircraft. The average remaining lease term was 6.3 years, also weighted by net book value, including maintenance rights. At March 31, 2016, the 79 aircraft were generating annualized rental revenue of approximately $292 million.