Fortress Transportation and Infrastructure Investors LLC

04/25/2024 | Press release | Distributed by Public on 04/25/2024 14:18

FTAI Aviation Ltd. Reports First Quarter 2024 Results, Declares Dividend of $0.30 per Ordinary Share - Form 8-K

FTAI Aviation Ltd. Reports First Quarter 2024 Results, Declares Dividend of $0.30 per Ordinary Share

NEW YORK, April 25, 2024 (GLOBE NEWSWIRE) - FTAI Aviation Ltd. (NASDAQ: FTAI) (the "Company" or "FTAI") today reported financial results for the first quarter 2024. 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 Results
Q1'24
Net Income Attributable to Shareholders
$
31,287
Basic Earnings per Ordinary Share
$
0.31
Diluted Earnings per Ordinary Share
$
0.31
Adjusted EBITDA(1)
$
164,101

(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

First Quarter 2024 Dividends
On April 25, 2024, 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 March 31, 2024, payable on May 21, 2024 to the holders of record on May 10, 2024.
Additionally, on April 25, 2024, 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 March 31, 2024, payable on June 14, 2024 to the holders of record on June 3, 2024.
Business Highlights

•
FTAI Aviation Ltd. and LATAM Airlines Group S.A. enter into a Perpetual Power Program covering over 60 engines.

•
Aerospace Products Adj. EBITDA reached $70 million, a 28.7% quarterly growth versus Q4 2023 and 156.7% growth vs Q1 2023. (1)
(1)
For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

1
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 Friday, April 26, 2024 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BId3fa86dd156541f2888a619e6966f685/. 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 Friday, April 26, 2024 through 11:30 A.M. on Friday, May 3, 2024 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 and V2500 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

2
Exhibit - Financial Statements
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

Three Months Ended March 31,
2024
2023
Revenues
Lease income
$
53,161
$
55,978
Maintenance revenue
45,790
35,141
Asset sales revenue
38,607
108,691
Aerospace products revenue
189,057
85,113
Other revenue
79
7,795
Total revenues
326,694
292,718
Expenses
Cost of sales
142,804
145,670
Operating expenses
25,317
22,534
General and administrative
3,683
4,067
Acquisition and transaction expenses
6,179
3,262
Management fees and incentive allocation to affiliate
4,895
2,997
Depreciation and amortization
49,920
40,926
Asset impairment
962
1,220
Interest expense
47,707
39,292
Total expenses
281,467
259,968
Other (expense) income
Equity in losses of unconsolidated entities
(667
)
(1,335
)
Other income
634
8
Total other expense
(33
)
(1,327
)
Income before income taxes
45,194
31,423
Provision for income taxes
5,572
2,026
Net income
39,622
29,397
Less: Dividends on preferred shares
8,335
6,791
Net income attributable to shareholders
$
31,287
$
22,606
Earnings per share:
Basic
$
0.31
$
0.23
Diluted
$
0.31
$
0.22
Weighted average shares outstanding:
Basic
100,245,905
99,728,245
Diluted
100,960,065
100,974,100

3
FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
March 31, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
65,224
$
90,756
Restricted cash
150
150
Accounts receivable, net
137,399
115,156
Leasing equipment, net
2,187,716
2,032,413
Property, plant, and equipment, net
44,114
45,175
Investments
22,055
22,722
Intangible assets, net
46,583
50,590
Goodwill
4,630
4,630
Inventory, net
345,470
316,637
Other assets
322,565
286,456
Total assets
$
3,175,906
$
2,964,685
Liabilities
Accounts payable and accrued liabilities
$
139,250
$
112,907
Debt, net
2,693,754
2,517,343
Maintenance deposits
62,722
65,387
Security deposits
42,431
41,065
Other liabilities
60,143
52,100
Total liabilities
$
2,998,300
$
2,788,802
Commitments and contingencies
Equity
Ordinary shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,245,905 and 100,245,905 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)
$
1,002
$
1,002
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and 15,920,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)
159
159
Additional paid in capital
218,074
255,973
Accumulated deficit
(42,163
)
(81,785
)
Shareholders' equity
177,072
175,349
Non-controlling interest in equity of consolidated subsidiaries
534
534
Total equity
177,606
175,883
Total liabilities and equity
$
3,175,906
$
2,964,685
4
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

Three Months Ended March 31,
2024
2023
Cash flows from operating activities:
Net income
$
39,622
$
29,397
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Equity in losses of unconsolidated entities
667
1,335
Gain on sale of leasing equipment, net
(58,061
)
(31,657
)
Security deposits and maintenance claims included in earnings
(2,437
)
(9,842
)
Equity-based compensation
510
108
Depreciation and amortization
49,920
40,926
Asset impairment
962
1,220
Change in deferred income taxes
4,548
1,692
Change in fair value of guarantees
(259
)
(1,769
)
Amortization of lease intangibles and incentives
9,202
7,844
Amortization of deferred financing costs
2,638
2,017
Provision for credit losses
-
475
Other
(259
)
(326
)
Change in:
Accounts receivable
(27,945
)
(14,840
)
Inventory
(6,877
)
6,984
Other assets
(1,845
)
(2,013
)
Accounts payable and accrued liabilities
(10,252
)
6,088
Management fees payable to affiliate
238
(386
)
Other liabilities
(717
)
1,444
Net cash (used in) provided by operating activities
(345
)
38,697
Cash flows from investing activities:
Investment in unconsolidated entities
-
(19,500
)
Principal collections on finance leases
786
-
Principal collections on notes receivable
1,964
-
Acquisition of leasing equipment
(276,990
)
(127,513
)
Acquisition of property, plant and equipment
(1,312
)
(1,451
)
Acquisition of lease intangibles
862
(8,640
)
Purchase deposits for acquisitions
(25,535
)
(9,940
)
Proceeds from sale of leasing equipment
128,384
153,679
Proceeds for deposit on sale of aircraft and engine
2,098
1,042
Return of purchase deposits
530
-
Net cash used in investing activities
$
(169,213
)
$
(12,323
)

5
Three Months Ended March 31,
2024
2023
Cash flows from financing activities:
Proceeds from debt
$
210,000
$
145,000
Repayment of debt
(35,000
)
(220,000
)
Payment of deferred financing costs
(292
)
-
Receipt of security deposits
1,856
1,459
Return of security deposits
-
(65
)
Receipt of maintenance deposits
8,927
10,142
Release of maintenance deposits
(3,056
)
-
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs
-
61,729
Cash dividends - ordinary shares
(30,074
)
(29,919
)
Cash dividends - preferred shares
(8,335
)
(6,791
)
Net cash provided by (used in) financing activities
$
144,026
$
(38,445
)

Net decrease in cash and cash equivalents and restricted cash
(25,532
)
(12,071
)
Cash and cash equivalents and restricted cash, beginning of period
90,906
53,065
Cash and cash equivalents and restricted cash, end of period
$
65,374
$
40,994

6
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 attributable to shareholders to Adjusted EBITDA for the three months ended March 31, 2024 and 2023:
Three Months Ended
March 31,

(in thousands)
2024
2023
Change
Net income attributable to shareholders
$
31,287
$
22,606
$
8,681
Add: Provision for income taxes
5,572
2,026
3,546
Add: Equity-based compensation expense
510
108
402
Add: Acquisition and transaction expenses
6,179
3,262
2,917
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
962
1,220
(258
)
Add: Incentive allocations
4,308
2,942
1,366
Add: Depreciation and amortization expense (1)
59,122
48,770
10,352
Add: Interest expense and dividends on preferred shares
56,042
46,083
9,959
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
(548
)
(696
)
148
Less: Equity in losses of unconsolidated entities
667
1,335
(668
)
Less: Non-controlling share of Adjusted EBITDA
-
-
-
Adjusted EBITDA (non-GAAP)
$
164,101
$
127,656
$
36,445

(1)
Includes the following items for the three months endedMarch 31, 2024 and 2023: (i) depreciation and amortization expense of $49,920 and $40,926, (ii) lease intangible amortization of $3,976 and $3,983 and (iii) amortization for lease incentives of $5,226 and $3,861, respectively.
(2)
Includes the following items for the three months endedMarch 31,2024 and 2023: (i) net loss of $667 and $1,335, (ii) depreciation and amortization expense of $119 and $400, and (iii) acquisition and transaction expenses of $0 and $239, respectively.
For a reconciliation of net income attributable to shareholders to Adjusted EBITDA for the three months ended December 31, 2023, refer to the appendix of the FTAI Aviation Ltd. Earnings Supplement for the period Q4'23.

7