Chief Financial Officer
BURLINGAME, California, March 30, 2020 -- AeroCentury Corp. ("AeroCentury" or the "Company") (NYSE American: ACY), an independent aircraft leasing company, today reported a fourth quarter 2019 net loss of $7.0 million, or ($4.55) per share, compared to a net loss of $3.8 million, or ($2.48) per share, for the fourth quarter of 2018. Net loss for the year ended December 31, 2019 was $16.7 million or ($10.78) per share, as compared to a net loss of $8.1 million, or ($5.58) per share in 2018. The results for the fourth quarter of 2018 and subsequent periods reflect the combined operations of AeroCentury and its subsidiary, JetFleet Holding Corp. ("JetFleet"), which was acquired by the Company on October 1, 2018.
The termination of the leases for, and repossession of, four aircraft from one of the Company’s lessees (“Repossessed Aircraft”) in the third quarter of 2019 had a substantial adverse impact on the Company’s results. As a result of those events, the Company recognized maintenance reserves revenue of $17.0 million with respect to the Repossessed Aircraft at the time of repossession, but also recorded impairment losses for the Repossessed Aircraft of $22.3 million and $6.1 million during the third and fourth quarters, respectively, based on third-party appraised values for three of the aircraft and expected sales proceeds for the fourth aircraft. Results for the year ended December 31, 2019 also included impairment losses totaling $2.6 million, based on third-party appraised values or expected sales proceeds, for three older turboprop aircraft, a spare engine and an older turboprop aircraft that is being sold in parts.
The results for the year ended December 31, 2019 included a $2.9 million bad debt allowance related to three of the Company’s aircraft that are leased pursuant to finance leases, one of which was sold to the lessee in January 2020. Although the Company recorded a bad debt allowance of $3.9 million during the third quarter of 2019, the Company reduced its allowance by $1.0 million during the fourth quarter of 2019 as a result of cash received during the quarter and anticipated cash to be received from the lessees in the first quarter of 2020. Results for the quarter and year ended December 31, 2019 also included ($199,900) and $255,200, respectively, of non-cash amounts related to interest rate swaps the Company entered into during the first quarter of 2019.
The results for the fourth quarter and the year ended December 31, 2018 included a settlement loss of $2.5 million in connection with the acquisition of JetFleet, the parent of the management company for the Company, which closed on October 1, 2018. The 2018 fourth quarter and full year results also included $1.0 million and $3.4 million, respectively, of net losses related to the sale of off-lease, older turboprop aircraft. The 2018 full year results also included impairment provisions totaling $3.0 million on five off-lease turboprop aircraft that were identified as held for sale, two of which were sold during the year, as well as $1.6 million of maintenance reserves revenue resulting from payments received from a lessee that returned three leased aircraft to the Company in 2017 which payments the Company has recorded as they were received.
As a result of the asset impairments and bad debt allowances discussed above, the Company is in default of several provisions of its credit facility, under which approximately $84 million in borrowings are currently outstanding. While in default, the Company is unable to borrow any additional amounts under the credit facility. Further, the default has given rise to a number of remedies in favor of the lenders, including but not limited to the acceleration of maturity of all amounts owing under the credit facility and the ability to act upon the security interests of the lenders in substantially all of the Company’s aircraft assets. The Company is currently in negotiations with its credit facility lenders in an attempt to convert the credit facility into a term loan facility.Fourth Quarter 2019 Highlights and Comparative Data
Aircraft and Engine Portfolio
AeroCentury’s portfolio currently consists of sixteen aircraft, spread over seven different aircraft types. Eleven of the aircraft, comprised of nine regional jets and two turboprops, are held for lease. Three additional regional jets and two turboprops are held under sales-type or direct finance leases. The Company also has three turboprop aircraft, two of which are being sold in parts, and three regional jet aircraft that are held for sale. The current customer base comprises nine customers operating in seven 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.