FTAI Aviation Ltd. Reports Second Quarter 2023 Results, Declares Dividend of $0.30 per Ordinary Share

NEW YORK, July 26, 2023 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the second quarter 2023. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

 (in thousands, except per share data)   
 Selected Financial ResultsQ2’23 
 Net Income Attributable to Shareholders$46,418 
 Basic Earnings per Ordinary Share from Continuing Operations$0.47 
 Diluted Earnings per Ordinary Share from Continuing Operations$0.46 
 Adjusted EBITDA(1)$153,077 
 ____________________________   
 (1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.   
     

Second Quarter 2023 Dividends

On July 25, 2023, the Company’s Board of Directors (the “Board”) declared a cash dividend on our ordinary shares of $0.30 per share for the quarter ended June 30, 2023, payable on August 29, 2023 to the holders of record on August 14, 2023.

Additionally, on July 25, 2023, the Board declared cash dividends on its Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”), Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”), Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) and Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”) of $0.51563, $0.50000, $0.51563 and $0.59375 per share, respectively, for the quarter ended June 30, 2023, payable on September 15, 2023 to the holders of record on September 1, 2023.

Business Highlights

  • Q2 2023 Net Income attributable to Shareholders of $46.4 million
  • $30.1 million Aerospace Products Adj. EBITDA at 44% overall margin
  • Generated $148.0 million positive cashflow for asset acquisition & investment activity

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Center section of the Company’s website, https://www.ftaiaviation.com, and the Company’s Quarterly Report on Form 10-Q, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.

Conference Call

In addition, management will host a conference call on Thursday, July 27, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering at https://register.vevent.com/register/BI7cde64c0dac24e88bb4ba97051465bde. Once registered, participants will receive a dial-in and unique pin to access the call.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at https://www.ftaiaviation.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A replay of the conference call will be available after 11:30 A.M. on Thursday, July 27, 2023 through 11:30 A.M. on Thursday, August 3, 2023 on https://ir.ftaiaviation.com/news-events/presentations.

The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.

About FTAI Aviation Ltd.

FTAI owns and maintains commercial jet engines with a focus on CFM56 engines. FTAI’s propriety portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations customer base. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftaiaviation.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

For further information, please contact:

Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com

Exhibit - Financial Statements

 
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
 
 Three Months Ended June 30, Six Months Ended June 30,
  2023   2022   2023   2022 
Revenues       
Lease income$59,541  $39,640  $115,519  $78,965 
Maintenance revenue 42,065   39,932   77,206   76,664 
Asset sales revenue 101,486      210,177    
Aerospace products revenue 68,075   26,497   153,188   40,810 
Other revenue 3,178   5,995   10,973   7,316 
Total revenues 274,345   112,064   567,063   203,755 
Expenses       
Cost of sales 104,532   15,141   250,202   24,191 
Operating expenses 24,797   19,000   47,331   80,800 
General and administrative 3,188   3,906   7,255   8,467 
Acquisition and transaction expenses 2,672   3,219   5,934   5,492 
Management fees and incentive allocation to affiliate 5,563      8,560    
Depreciation and amortization 38,514   39,303   79,440   80,608 
Asset impairment    886   1,220   123,676 
Interest expense 38,499   47,889   77,791   92,030 
Total expenses 217,765   129,344   477,733   415,264 
Other (expense) income       
Equity in (losses) earnings of unconsolidated entities (380)  35   (1,715)  233 
Gain on sale of assets, net    63,645      79,933 
Other income 408   1,118   416   1,246 
Total other income (expense) 28   64,798   (1,299)  81,412 
Income (loss) from continuing operations before income taxes 56,608   47,518   88,031   (130,097)
Provision for income taxes 1,855   1,829   3,881   3,168 
Net income (loss) from continuing operations 54,753   45,689   84,150   (133,265)
Net loss from discontinued operations, net of income taxes    (35,929)     (86,634)
Net income (loss)  54,753   9,760   84,150   (219,899)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries:       
Continuing operations           
Discontinued operations    (8,480)     (15,946)
Less: Dividends on preferred shares 8,335   6,791   15,126   13,582 
Net income (loss) attributable to shareholders$46,418  $11,449  $69,024  $(217,535)
        
Earnings (loss) per share:       
Basic       
Continuing operations$0.47  $0.40  $0.69  $(1.48)
Discontinued operations$  $(0.28) $  $(0.71)
Diluted       
Continuing operations$0.46  $0.39  $0.69  $(1.48)
Discontinued operations$  $(0.28) $  $(0.71)
Weighted average shares outstanding:       
Basic 99,732,179   99,370,301   99,730,223   99,367,597 
Diluted 100,462,277   99,805,455   100,314,508   99,367,597 


FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
  
 (Unaudited)  
 June 30, 2023 December 31, 2022
Assets   
Cash and cash equivalents$21,134  $33,565 
Restricted cash    19,500 
Accounts receivable, net 117,546   99,443 
Leasing equipment, net 1,891,263   1,913,553 
Property, plant, and equipment, net 12,123   10,014 
Investments 39,822   22,037 
Intangible assets, net 44,683   41,955 
Inventory, net 232,043   163,676 
Other assets 167,018   125,834 
Total assets$2,525,632  $2,429,577 
    
Liabilities   
Accounts payable and accrued liabilities$79,765  $86,452 
Debt, net 2,173,108   2,175,727 
Maintenance deposits 98,354   78,686 
Security deposits 37,192   32,842 
Other liabilities 45,895   36,468 
Total liabilities$2,434,314  $2,410,175 
    
Commitments and contingencies   
    
Equity   
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 99,737,046 and 99,716,621 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)$997  $997 
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and 13,320,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) 159   133 
Additional paid in capital 331,080   343,350 
Accumulated deficit (241,452)  (325,602)
Shareholders’ equity 90,784   18,878 
Non-controlling interest in equity of consolidated subsidiaries 534   524 
Total equity 91,318   19,402 
Total liabilities and equity$2,525,632  $2,429,577 
        


FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
 
 Six Months Ended June 30,
  2023   2022 
Cash flows from operating activities:   
Net income (loss)$84,150  $(219,899)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   
Equity in losses of unconsolidated entities 1,715   37,836 
Gain on sale of assets, net (75,960)  (79,933)
Security deposits and maintenance claims included in earnings (12,215)  (30,208)
Equity-based compensation 618   2,294 
Depreciation and amortization 79,440   114,923 
Asset impairment 1,220   123,676 
Change in deferred income taxes 3,127   6,200 
Change in fair value of non-hedge derivative    (748)
Change in fair value of guarantees (1,902)   
Amortization of lease intangibles and incentives 18,264   23,818 
Amortization of deferred financing costs 4,190   13,328 
Provision for credit losses 1,032   47,218 
Other (658)  (407)
Change in:   
Accounts receivable (21,918)  (47,061)
Inventory 11   (12,373)
Other assets (2,583)  (25,319)
Accounts payable and accrued liabilities (15,350)  5,045 
Management fees payable to affiliate 1,892   (1,829)
Other liabilities 2,168   (5,130)
Net cash provided by (used in) operating activities 67,241   (48,569)
    
Cash flows from investing activities:   
Investment in unconsolidated entities (19,500)  (2,232)
Principal collections on notes receivable 1,624    
Principal collections on finance leases 1,939   575 
Acquisition of business, net of cash acquired    (3,819)
Acquisition of leasing equipment (325,462)  (320,766)
Acquisition of property, plant and equipment (2,298)  (118,729)
Acquisition of lease intangibles (10,795)  (5,282)
Investment in promissory notes (11,500)   
Purchase deposits for acquisitions (11,200)  (7,100)
Proceeds from sale of leasing equipment 273,229   138,020 
Proceeds from sale of property, plant and equipment    4,304 
Proceeds for deposit on sale of aircraft and engine 1,817   8,245 
Receipt of deposits for sale of aircraft and engine 300    
Net cash used in investing activities$(101,846) $(306,784)


  Six Months Ended June 30,
  2023
  2022
Cash flows from financing activities:       
Proceeds from debt$325,000  $503,980 
Repayment of debt (330,000)  (224,724)
Payment of deferred financing costs (1,437)  (14,405)
Receipt of security deposits 5,577   1,890 
Return of security deposits (1,295)   
Receipt of maintenance deposits 18,070   24,418 
Release of maintenance deposits    (878)
Capital contributions from non-controlling interests 10   1,187 
Proceeds from issuance of preferred shares, net of underwriter’s discount and issuance costs 61,729    
Cash dividends - common shares (59,854)  (65,789)
Cash dividends - preferred shares (15,126)  (13,582)
Net cash provided by financing activities$2,674  $212,097 
    
Net decrease in cash and cash equivalents and restricted cash (31,931)  (143,256)
Cash and cash equivalents and restricted cash, beginning of period 53,065   440,061 
Cash and cash equivalents and restricted cash, end of period$21,134  $296,805 
        

Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.

Adjusted EBITDA provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares, and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022:

 Three Months Ended
June 30,
 Change
 Six Months Ended
June 30,
 Change
(in thousands)2023  2022    2023   2022  
Net income (loss) attributable to shareholders from continuing operations$46,418 $38,898  $7,520  $69,024  $(146,847) $215,871 
Add: Provision for income taxes 1,855  1,829   26   3,881   3,168   713 
Add: Equity-based compensation expense 510     510   618      618 
Add: Acquisition and transaction expenses 2,672  3,219   (547)  5,934   5,492   442 
Add: Losses on the modification or extinguishment of debt and capital lease obligations                
Add: Changes in fair value of non-hedge derivative instruments                
Add: Asset impairment charges   886   (886)  1,220   123,676   (122,456)
Add: Incentive allocations 5,324     5,324   8,266      8,266 
Add: Depreciation and amortization expense (1) 48,934  51,108   (2,174)  97,704   104,425   (6,721)
Add: Interest expense and dividends on preferred shares 46,834  54,680   (7,846)  92,917   105,612   (12,695)
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 150  152   (2)  (546)  406   (952)
Less: Equity in losses (earnings) of unconsolidated entities 380  (35)  415   1,715   (233)  1,948 
Less: Non-controlling share of Adjusted EBITDA                
Adjusted EBITDA (non-GAAP)$153,077 $150,737  $2,340  $280,733  $195,699  $85,034 

___________________________________________________________________________________

(1) Includes the following items for the three months ended June 30, 2023 and 2022: (i) depreciation and amortization expense of $38,514 and $39,303, (ii) lease intangible amortization of $3,616 and $3,310 and (iii) amortization for lease incentives of $6,804 and $8,495, respectively. Includes the following items for the six months ended June 30, 2023 and 2022: (i) depreciation and amortization expense of $79,440 and $80,608, (ii) lease intangible amortization of $7,599 and $6,968 and (iii) amortization for lease incentives of $10,665 and $16,849, respectively.

(2) Includes the following items for the three months ended June 30, 2023 and 2022: (i) net (loss) income of $(380) and $35, (ii) depreciation and amortization expense of $435 and $117 and (iii) acquisition and transaction expense of $95 and $0, respectively. Includes the following items for the six months ended June 30, 2023 and 2022: (i) net (loss) income of $(1,715) and $233, (ii) depreciation and amortization expense of $835 and $173 and (iii) acquisition and transaction expense of $334 and $0, respectively.


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