Fly Leasing Limited (NYSE: FLY) ("FLY"), a global leader in aircraft leasing, today announced its financial results for the first quarter of 2019.
Highlights
Net income of $45.0 million, $1.38 per share
Adjusted Net Income of $47.2 million, $1.44 per share
Sold ten aircraft for a gain of $27.6 million, a 12% premium to book value
$22.74 book value per share, a 15% increase since March 31, 2018
"FLY has started the year with a very strong first quarter," said Colm Barrington, FLY's Chief Executive Officer. "Our renewed and larger fleet contributed to an 18% increase in operating lease rental revenue. Gains of over $27 million from the sale of ten aircraft helped us to achieve record Adjusted Net Income of $47.2 million and Adjusted EPS of $1.44. Looking ahead, we expect another strong result in Q2."
"Our strong results have also added significantly to shareholders' equity, which is now nearly $23 per share and 15% above the level of a year ago," added Barrington. "Sales of ten aircraft in the quarter, completed at a 12% premium to book value, have again demonstrated the value embedded in FLY's fleet. These sales have also contributed to our accelerated deleveraging. We are on track to meet our debt-to-equity targets more than a year ahead of our schedule."
"We continue to see great value in FLY shares, which are trading at more than a 35% discount to book value. Following our successful deleveraging, we have begun repurchasing stock under our share repurchase program. FLY is also well positioned to add more aircraft assets as opportunities arise."
Financial Results
FLY is reporting net income of $45.0 million, or $1.38 per share, for the first quarter of 2019. This compares to net income of $9.6 million, or $0.34 per share, for the same period in 2018.
Adjusted Net Income
Adjusted Net Income was $47.2 million for the first quarter of 2019, compared to Adjusted Net Income of $12.4 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $1.44 in the first quarter of 2019, compared to Adjusted Net Income of $0.44 for the first quarter of 2018.
A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.
Financial Position
At March 31, 2019, FLY's total assets were $4.1 billion, including investment in flight equipment totaling $3.5 billion. Total cash at March 31, 2019 was $436.3 million, of which $363.9 million was unrestricted. The book value per share at March 31, 2019 was $22.74, a 15% increase since March 31, 2018. At March 31, 2019, FLY's net debt to equity ratio was 3.4x, reduced from 4.0x as of December 31, 2018.
Aircraft Portfolio
At March 31, 2019, FLY had 103 aircraft and seven engines in its portfolio. Of the 103 aircraft, 99 were held for operating lease, one was classified as an investment in finance lease and three were classified as held for sale. FLY's aircraft and engines are on lease to 44 airlines in 25 countries. The table below does not include one B767 aircraft owned by a joint venture in which FLY has a 57% interest, nor the seven engines.
At March 31, 2019, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 7.2 years. The average remaining lease term was 5.7 years, also weighted by net book value. At March 31, 2019, FLY's portfolio, excluding aircraft held for sale, was generating annualized rental revenue of approximately $411.2 million.