Chief Financial Officer
BURLINGAME, California, May 15, 2019 -- AeroCentury Corp. (“AeroCentury” or the “Company”) (NYSE American: ACY), an independent aircraft leasing company, today reported a first quarter net loss of $1.3 million, or $(0.85) per share, compared to net income $0.3 million, or $0.22 per share, for the first quarter of 2018. First quarter 2019 results reflect the combined operations of AeroCentury and its subsidiary, JetFleet Holding Corp. (“JetFleet”), which was acquired on October 1, 2018.
The results for the first quarter ended March 31, 2019 included $1.4 million of impairment provisions related to two older off-lease turboprop aircraft and a spare engine, all of which were written down to their estimated sales values. The Company expects the sales of these aircraft and engine to occur in the second quarter of 2019. First quarter 2019 results also included a one-time, non-cash charge of $0.4 million related to the Company’s interest rate swaps, which is included in interest expense. The first quarter of 2018 included $1.1 million of maintenance reserves revenue resulting from payments received during the first quarter of 2018 from a lessee that returned three leased aircraft to the Company in 2017.
“Despite the reported loss for the first quarter, there were significant positive developments for the Company that create stepping stones for the Company’s future success,” stated Michael Magnusson, AeroCentury’s President.
“First, we are indeed beginning to see the benefits of our acquisition of JetFleet in terms of cost reductions reflected in our first quarter results, and continue to expect this transaction will prove accretive to the Company’s earnings in the long term. As a unified portfolio and management company, our results going forward now present an integrated view of the Company’s business, cost management, and financial performance, which we believe gives our shareholder base and potential new investors better insight into the Company’s business.
Second, the renewal, in February, of our revolving credit facility to February 2023, together with the refinancing of six of our aircraft with non-recourse term loans with a new lender that same month, has freed up availability of acquisition financing under our credit facility.
Third, the Company took a major step in the first quarter in furtherance of its fleet modernization program. We currently have three remaining older turboprop aircraft being held for sale, but we expect to sell two of them in the second quarter of 2019, and as a result of that anticipated sale, we were required to write down the book value on those two aircraft to their sales price.”Fourth Quarter 2019 Highlights and Comparative Data
Aircraft and Engine Portfolio
AeroCentury’s portfolio currently consists of twenty-two aircraft, spread over nine different aircraft types. Sixteen of the aircraft, comprised of thirteen regional jets and three turboprops, are held for lease. Three additional regional jets and three turboprops are held under sales-type or direct finance leases. The Company also has one engine and five turboprop aircraft that are held for sale, two of which are being sold in parts. The current customer base comprises nine customers operating in eight countries.
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About AeroCentury: AeroCentury is an independent 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 potential for the Company’s acquisition of JetFleet Holding Corp. to lower overall management costs, and thereby be accretive to shareholders in the long term, and (b) improving the transparency of the Company’s business by bring management in-house.
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) unanticipated increases in costs and expenses in connection with management of the Company; (b) a substantial change in the character of the aircraft portfolio or the status of aircraft lessees such that management of the portfolio would require additional expenditures of human and other resources. 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 "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors that May Affect Future Results and Liquidity" 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 as of the date hereof and speak only as of such date. The Company does not intend, and assumes no obligation, to update any forward looking statements made in this press release. For these reasons, readers are cautioned not to place undue reliance on forward-looking statements.