Acting President and Chief Financial Officer
FOR IMMEDIATE RELEASE
(BURLINGAME, CA), August 11, 2016 — AeroCentury Corp. (NYSE MKT: ACY), an independent aircraft leasing company, today reported second quarter 2016 earnings of $299,000, or $0.19 per diluted share, compared to $1.4 million, or $0.87 per diluted share, for the second quarter of 2015, and $434,000, or $0.28 per diluted share, for the first quarter of 2016. Earnings reported for the second quarter of 2016 included gains of $2.2 million related to an aircraft disposition pursuant to a sales-type finance lease and insurance proceeds for one aircraft. In 2015, gains of $2.7 million related to dispositions of aircraft pursuant to sales-type finance leases boosted earnings.
In the first half of 2016, net income totaled $732,000, or $0.47 per diluted share, compared to $2.1 million, or $1.36 per diluted share in the first half of 2015. Net income for the six months ended June 30, 2016 included gains of $2.2 million related to aircraft dispositions pursuant to sales-type finance leases, as well as insurance proceeds for one aircraft and, in 2015, gains of $4.5 million related to dispositions of aircraft for cash and pursuant to sales-type finance leases. All reported results are unaudited.
"We posted positive earnings in the second quarter and first half of 2016, despite a reduction in our margins and overall profitability. This was a result of a 22% contraction of our lease portfolio over the past twelve months," said Toni M. Perazzo, Chief Financial Officer and Acting President. "Of the $37.2 million reduction in our portfolio since June 30, 2015, one-third was a result of our strategic decision to modernize the fleet and improve our mix of equipment to better meet market demand by selling older equipment for cash or through sales-type finance leases. The remainder of the portfolio reduction was due to the accidental loss of one of our newest turboprops in April, with a book value of approximately $16 million, as well as routine depreciation over the past twelve months."
Ms. Perazzo continued, "Consistent with our strategy of modernizing our aircraft portfolio, we recently purchased two 100-seat CRJ-1000 regional jet aircraft manufactured in 2010 on lease to Air Nostrum, one of the leading regional carriers in Europe. On the sale side, we negotiated the sale of two older turboprop aircraft pursuant to sales-type finance leases for delivery in September."
Second Quarter 2016 Highlights (at or for the periods ended June 30, 2016, March 31, 2016 and June 30, 2015):
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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.
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the statement that the Company expects to deliver two aircraft under sales-type finance leases in September. All statements, other than statements of historical fact, included herein are "forward-looking statements.” Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including unanticipated events that affect the availability of appropriate aircraft for acquisition and financing therefor and unanticipated increases in interest under the Company’s credit facility, and inability to reach acceptable final agreements for the anticipated acquisition, as well as those discussed in the Company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the Company does not assume a duty to update any forward-looking statement.