Chief Financial Officer
(BURLINGAME, CA) November 9, 2017 — AeroCentury Corp. (NYSE American: ACY), an independent aircraft leasing company, today reported third quarter 2017 earnings of $385,000, or $0.27 per share, compared to $356,000, or $0.25 per share, in the second quarter of 2017 and compared to $530,000, or $0.34 per share, in the third quarter of 2016.
In the first nine months of 2017, net income grew 10% to approximately $1.4 million, or $0.95 per share, from approximately $1.3 million, or $0.81 per share in the first nine months of 2016.
AeroCentury Corp. announced on October 26th the signing of a merger agreement to acquire JetFleet Holding Corp. (JHC), the parent of JetFleet Management Corp., which has managed the Company’s operations and aircraft portfolio since the Company’s founding in 1997. Under the Merger Agreement, JHC shareholders are to receive $3.5 million in cash and 129,286 shares of the Company's Common Stock, subject to various adjustments at closing, in return for all the outstanding capital stock of JHC. The closing of the acquisition is expected to occur in the first quarter of 2018.
Third Quarter 2017 Highlights
"We are continuing to modernize our portfolio of mid-life leased aircraft, acquiring one Embraer 175 aircraft in the third quarter of 2017 and two Embraer 175 aircraft in the second quarter," said Michael Magnusson, Chief Executive Officer. "We now have 6 Embraer jet aircraft, 10 Bombardier jet aircraft, and 16 turboprops, and we are in the process of selling 2 Fokker 100 jet aircraft. Our portfolio of aircraft held for lease now has a weighted average aircraft age of approximately 11 years, and an average remaining lease term of 60 months."
1Operating margin and net margin are non-GAAP measures. Operating margin is calculated by dividing "Income before income taxes" by "Total revenue." Net margin is calculated by dividing "Net income" by "Total revenue." See Additional Financial Information at the end of the pdf version of this press release for a reconciliation to their most directly comparable GAAP measure.
2EBITDA is a non-GAAP measure. See Additional Financial Information below for its method of calculation and reconciliation to its most directly comparable GAAP measure at the end of the pdf version of this press release.
"We believe the acquisition of JHC marks a significant milestone in our growth by eliminating the third-party management structure, thereby improving visibility into our performance," Magnusson said. "In addition, we believe the acquisition will facilitate access to capital sources to fuel our growth and will be accretive to earnings."
Third Quarter 2017 Comparatie Data (at or for the periods ended September 30, 2017, June 30, 2017, and September 30, 2016):
AeroCentury's portfolio currently consists of twenty-five aircraft and two engines that are held for lease and nine aircraft that are held under sales-type or direct finance leases. The Company also has three turboprop aircraft that are held for sale, two of which are being sold in parts.
The Company's portfolio consists of twelve different aircraft types. The current customer base comprises eleven airlines operating in ten countries.
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AeroCentury is a global aircraft operating lessor and finance company specializing in leasing regional jet and turboprop aircraft and related engines. The Company's aircraft and engines are leased to regional airlines and commercial users worldwide.
This press release contains forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements that are purely historical are forward-looking statements. Forward-looking statements in this press release include, without limitation, statements regarding (a) the consummation of the Company's acquisition of JHC, (b) any future potential accretion resulting from the acquisition, and (c) any effect of the acquisition on the Company's ability to raise capital. The Company's beliefs, expectations, forecasts, objectives and strategies for the future are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including but not limited to (a) the failure of the acquisition to be consummated, as a result of the failure of conditions precedent or otherwise, (b) the Company's inability to perform the management services previously performed by JetFleet Management Corp. at a cost less than the fees that would otherwise be payable pursuant to the management agreement, and (c) the Company's inability to raise capital on attractive terms, or at all. The forward-looking statements in this press release and the Company's future results of operations are subject to additional risks and uncertainties set forth under the heading "Factors that May Affect Future Results" in documents filed by the Company with the Securities and Exchange Commission, including the Company's quarterly reports on Form 10-Q and the Company's latest annual report on Form 10-K, and are based on information available to the Company on the date hereof. The Company does not intend, and assumes no obligation, to update any forward-looking statements made in this press release. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.