Acting President and Chief Financial Officer
FOR IMMEDIATE RELEASE
(BURLINGAME, CA), May 15, 2014 — AeroCentury Corp. (NYSE MKT: ACY), an independent aircraft leasing company, today reported its operating results for the first quarter ended March 31, 2014. Effective as of January 1, 2014, the Company adopted an alternate method of accounting for non-refundable maintenance reserves and certain lessor maintenance costs. In order to provide a meaningful comparison for first quarter 2014 results, the March 31, 2013 and December 31, 2013 results stated below and in the accompanying tables were calculated as if the new method of accounting were in effect throughout the applicable periods ending on those dates.
The Company reported net income of $0.4 million, or $0.23 per diluted share, for the first quarter of 2014, compared to net income of $3.8 million, or $2.41 per diluted share, for the first quarter of 2013.
Total revenues were $8.0 million for the first quarter ended March 31, 2014, compared to total revenues of $12.2 million for the same period a year ago.
Operating lease revenue was higher in the first quarter ended March 31, 2014, compared to the same period a year ago primarily as a result of increases in operating lease revenue from assets purchased during 2013 and 2014. The effect of these increases was partially offset by the effect of assets that were on lease in the 2013 period but off lease in the 2014 period and the effect of assets sales during 2013.
Maintenance reserves revenue, which is recorded upon lease termination, was lower in the first quarter of 2014 compared to the same period a year ago. The decrease was primarily due to the one-time accrual of revenue related to two aircraft that were returned in the first quarter of 2013.
The Company recorded a net gain from the sale of two aircraft in the first quarter of 2014 and recorded a net gain in the first quarter of 2013 from the sale of one aircraft. During the first quarter of 2013, the Company also recorded other income of $0.5 million related to security deposits retained upon early termination of two leases following the lessee’s bankruptcy.
Total expenses increased by $0.8 million in the first quarter of 2014 as compared to the same period in 2013.
The Company’s maintenance expense was higher in the first quarter of 2014 compared to the same period of 2013, as a result of increases in maintenance performed by the Company on off-lease aircraft.
The Company’s interest expense was higher in the first quarter of 2014 than in the same period of 2013, primarily as a result of a higher average outstanding debt balance, the effect of which was offset by lower amortization of loan fees.
As of March 31, 2014, the Company’s portfolio consisted of six aircraft engines and forty-two aircraft, covering nine different aircraft types. As of March 31, 2014, our customer base consisted exclusively of regional carriers – thirteen different airlines operating worldwide.
AeroCentury is an aircraft operating lessor and finance company specializing in leasing regional aircraft and engines utilizing triple net leases. The Company’s aircraft and engines are leased to regional airlines and commercial users worldwide.
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