Fly Leasing reported an improved first quarter net income of $32.8 million, compared with net income of $20.4 million for year-earlier period due to gains from the sale of six Boeing 717s and an increase in end-of-lease income.
Total revenues increased to $114.4 million in the quarter compared with total revenues of $104.5 million in the first quarter of 2012.
Operating lease revenue of $104 million includes $30.6 million of end-of-lease income, compared with $15.9 million in end-of-lease income in the year-earlier period.
"Fly is reporting another strong quarter, with higher revenues, lower expenses, a reduced debt to equity ratio and a stronger cash position," says Colm Barrington, chief executive officer of Fly Leasing. "Our higher revenues were positively impacted by end of lease revenues and aircraft sales proceeds. During the quarter we continued our strategy of actively managing our fleet by selling one A320, our six 717s and two 737 Classics for a gain of more than $6 million."
In the quarter, Fly reduced its debt by more than $70 million while increasing its unrestricted cash to nearly $200 million, says Barrington.
"As a result we have more than achieved our 3.5x leverage target, with actual net leverage of 3.2x at quarter end. Fly's net book value exceeded $20 per share at the end of the quarter."
Barrington says the lessor's nearly $200 million of free cash provides Fly with funds to achieve its growth targets for the year.
"In April, we purchased a new 737-800 on a long-term lease to an Asian airline. All but one of Fly's 38 737s are now Next Generation aircraft." adds Barrington. "In the meantime, forecasts for the global airline industry have become increasingly positive."
Yesterday, Fly's board of directors approved a $30 million share repurchase programme, expiring in May 2014, to replace the previous one.
Fly's total assets were $2.9 billion at quarter end, including flight equipment with a net book value of $2.5 billion.
Cash and cash equivalents totalled $344.7 million, of which $196.7 million was unrestricted. This compares with total cash and cash equivalents of $300.6 million at 31 December 2012, of which $163.1 million was unrestricted.
Fly says leases on its 100-aircraft portfolio were generating annualised rental revenues of approximately $307 million at 31 March. Its lease utilisation factor was 94% for the quarter.
On 15 April, Fly declared a dividend of $0.22 per share in respect of the first quarter - its 22nd consecutive quarterly dividend.