Chief Financial Officer
BURLINGAME, California, August 7, 2019 -- AeroCentury Corp. ("AeroCentury" or the "Company") (NYSE American: ACY), an independent aircraft leasing company, today reported a second quarter 2019 net loss of $78,000, or $(0.05) per share, compared to a net loss of $81,000, or $(0.06) per share, for the second quarter of 2018. Second quarter 2019 results reflect the combined operations of AeroCentury and its subsidiary, JetFleet Holding Corp. ("JetFleet"), which was acquired by the Company on October 1, 2018.
In the first six months of 2019, the Company reported a net loss of $1.4 million, or $(0.90) per share, compared to net income of $236,200, or $0.17 per share, in the first six months of 2018.
The results for the second quarter included a $160,000 impairment provision, based on appraised value, for one older turboprop aircraft that is held for sale, but is on a short-term operating lease. The six months ended June 30, 2019 also included impairment provisions related to two older turboprop aircraft and a spare engine, all of which remain off lease. The sale of those three assets is expected to occur in the third quarter of 2019.
The results for the second quarter and first six months of 2019 included a $171,000 loss related to the reclassification of an asset held for lease to a finance lease receivable as a result of a lease amendment under which the customer agreed to buy the aircraft at lease expiration in November 2019.
Results for the second quarter and first six months of 2019 included $43,000 and $451,000 respectively, of non-cash charges related to interest rate swaps the Company entered into during the first quarter.
The second quarter and first six months of 2018 included $579,000 and $1.6 million, respectively, of maintenance reserves revenue resulting from payments received from a lessee that returned three leased aircraft to the Company in 2017.
"Our results are now beginning to reflect cost reductions as a result of the Company’s acquisition of its management company and our expense-cutting efforts. Salaries, employee benefits and professional and other fees for the second quarter of 2019 were $300,000 less when compared to the pre-acquisition management fees and professional and other fees incurred in the same period last year," said Michael Magnusson, President of the Company.
"Furthermore, the Company is nearing completion of its fleet modernization program,” Magnusson continued. “We anticipate the sale of three older assets will be consummated during the third quarter. The Company’s other single remaining older aircraft is on a short-term operating lease and is being actively marketed for sale. Executing our portfolio modernization program has not only resulted in a 98% utilization rate during the first half of 2019, it is an essential element to position the Company for success going forward, as it will allow the Company to focus on growing our portfolio by acquiring newer mid-life regional aircraft types that satisfy the current and anticipated future needs of our customer base of regional airlines."Second 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. Fifteen of the aircraft, comprised of thirteen regional jets and two turboprops, are held for lease. Three additional regional jets and four 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.
Please view PDF for tables by clicking here.
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 continued effect of cost cutting efforts and cost savings arising from the acquisition of the management company; (b) the anticipated sale of three older assets in the third quarter of 2019, and (c) the Company’s focus on growing its portfolio by replacing older aircraft with newer mid-life regional aircraft types that satisfy the current and anticipated future needs of its customer base. 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) the failure of the Company to consummate the sale of the three older assets due to the failure of either party to meet conditions precedent for the purchase and sale of such assets; (b) the availability of acceptable mid-life regional aircraft for acquisition and sufficient acceptable financing for such acquisitions; and (c) unanticipated changes in demand for the specific regional aircraft types currently owned or to be acquired by the Company. 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.