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Fly Leasing Reports Third Quarter 2015 Financial Results And Announces Share Repurchase Program

The following excerpt is from the company's SEC filing.

Fly Leasing Limited (NYSE: FLY) (“FLY”), a global leader in aircraft leasing, today announced its financial results for the third quarter of 2015 and a $100 million share repurchase program

Third Quarter 2015 Highlights

Adjusted net income of $32.3 million, or $0.78 per share

Net income of $19.9 million, or $0.47 per share

Invested $214 million in new aircraft

Completed sales of 15 aircraft

Executed an agreement to sell 12 older aircraft

Tender Offer and Share Repurchase Program

$75 million modified Dutch auction te nder offer

$25 million open market repurchase program

$10 million in additional open market purchases by BBAM shareholders

These initiatives replace the dividend

“Our third quarter results demonstrate our progress in selling older and underperforming assets, enhancing our fleet metrics and reducing costs,” said Colm Barrington, FLY’s CEO. “Today we announced the next step in FLY’s transformation: a $100 million share repurchase program that will replace our dividend. The tender offer and open market share repurchase announced today will accelerate the return of capital to shareholders and will drive improved return on equity and earnings per share for FLY.”

“We have entered into agreements to sell a total of 57 aircraft with an average age of 13 years,” added Barrington. “Aircraft sales, combined with our purchase of seven newer aircraft, have reduced our average fleet age to seven years at quarter end, a decrease of one year over the prior quarter. We have also improved our cost structure by driving lower annual SG&A and interest expense.”

“Our aircraft sales have generated significant levels of investible cash, enabling us to simultaneously invest in newer, higher yielding aircraft and accelerate the return of capital to our shareholders,” added Barrington. “With our younger fleet, the financial firepower to carry out our growth strategy and our new initiatives, FLY will continue to grow the value of the business for our shareholders.”

Financial Results

FLY is reporting net income of $19.9 million or $0.47 per diluted share for the third quarter of 2015. This compares to net income of $15.4 million or $0.37 per diluted share for the same period in 2014.

Total revenues increased to $106.2 million. Operating lease rental revenue for the third quarter of 2015 was $104.4 million, compared to $98.0 million for the same period in the previous year, an increase of 7%. The increase was driven primarily by recently acquired aircraft and improved utilization. Revenues include $27.7 million of rents from aircraft that are contracted to be sold.

The net loss for the nine month period ended September 30, 2015 was $21.1 million, or $0.53 per share. This compares to net income of $40.6 million, or $0.95 per share, for the same period in 2014. The current year loss reflects a non-cash $65.4 million impairment charge taken in the second quarter. The prior year results included $18.0 million of end of lease income and $18.9 million of gain on sale of aircraft. For the current year, end of lease income was $26.9 million and gain on sale of aircraft totaled $9.1 million.

Adjusted Net Income

Adjusted Net Income for the third quarter of 2015 was $32.3 million, or $0.78 per share, as compared to $22.8 million, or $0.55 per share, for the same period in 2014. For the nine month period ended September 30, 2015, Adjusted Net Income was $68.4 million, or $1.65 per share, as compared to $58.6 million, or $1.42 per share, for the same period in 2014.

Dividend and Share Repurchases

FLY announced today that its Board of Directors approved a $100 million share repurchase plan, including a $75 million modified Dutch auction tender offer, replacing its dividend. The share repurchases will be funded using FLY’s unrestricted cash. The $25 million open market share repurchase plan will be authorized through the end of 2016 and may be suspended or discontinued at any time. BBAM shareholders have informed FLY's Board that they intend to acquire an additional $10 million of shares in the open market following the tender offer.

Under FLY’s previously authorized share repurchase program, through September 30, 2015, the company repurchased 141,773 shares at an average price of $13.01 per share for a total cost of approximately $1.9 million. Subsequent to quarter end, FLY acquired an additional 279,556 shares through November 11, 2015, for a total aggregate of 421,329 shares and a total cost of $5.5 million.

On October 15, 2015, FLY declared a dividend of $0.25 per share in respect of the third quarter of 2015. This dividend will be paid on November 20, 2015 to shareholders of record on October 30, 2015.

Financial Position

At September 30, 2015, FLY’s total assets were $4.0 billion, and include $2.6 billion of flight equipment held for operating lease and $796.1 million of flight equipment held for sale. The aircraft classified as held for sale are subject to sale agreements and are expected to be sold over the next few months.

Total cash at September 30, 2015 was $564.6 million, of which $378.9 million is unrestricted. This compares to total cash of $476.7 million at December 31, 2014...


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