BURLINGAME, Calif.,
Aug. 14, 2015 /PRNewswire/
-- AeroCentury Corp. (NYSE MKT: ACY), an independent aircraft
leasing company, today reported earnings growth of 80% to
$1.4 million, or $0.87 per diluted share, in the second quarter of
2015, from $752,000, or $0.48 per diluted share, in the first quarter of
2015. Second quarter profits were fueled by the Company's
portfolio modernization program, which is generating gains from
sale of older assets. Following the $6.8 million non-cash, pre-tax write-down of
certain older aircraft, the net loss in the second quarter of 2014
was $3.9 million, or ($2.54) per diluted share.
Net income improved to $2.1
million, or $1.36 per diluted
share, for the first six months of 2015, compared to a net loss of
$3.6 million, or $2.30 per diluted share, for the first six months
of 2014. All reported results are unaudited.
"Our initiatives to modernize our portfolio of regional aircraft
have generated improved utilization and contributed to strong lease
revenues this year," said Neal D.
Crispin, President and Chief Executive Officer. "We
are also pleased to have the continuing support of a strong
majority of our shareholders in the recent annual election of
directors. We view this year's proxy results from our
shareholders as a vote of confidence in both our board of directors
and in our business model."
Second Quarter 2015 Highlights (at or for the periods
ended June 30, 2015, compared to
March 31, 2015 and June 30, 2014):
- Average portfolio utilization was 90% during both the first and
second quarters of 2015, compared to 77% a year ago, reflecting the
improved mix of assets in the lease portfolio.
- Maintenance reserves revenue, which is generated when long-term
leases end, was $262,000 in the
second quarter of 2015, compared to $327,000 in the first quarter of 2015 when one
aircraft was returned in each quarter, and $1.7 million in the second quarter of 2014 when
six aircraft were returned.
- Operating lease revenues decreased 1.6% to $6.3 million in the second quarter of 2015,
compared to $6.4 million in the first
quarter. Operating lease revenue increased 18.8% from $5.3 million a year ago, primarily because of
revenue from three aircraft purchased during 2014 and four assets
that were off lease in the 2014 period, but on lease in the 2015
period. The effect of these increases was partially offset by the
loss of revenue from eight assets that were on lease in the 2014
period, but off lease or subject to sales-type finance leases in
the 2015 period, and by the sale of two assets during 2014.
- Two aircraft were returned according to scheduled lease terms
during the first half of the year. These aircraft were re-leased
under sales-type finance leases, generating gains of $2.68 million in the second quarter and
$1.86 million in the first quarter
for a total of $4.54 million
year-to-date.
- Total revenues increased 8.6% to $9.4
million for the second quarter of 2015, compared to
$8.6 million in the preceding
quarter, reflecting an increase in gain on sale of aircraft. The
18.9% increase in total revenues from $7.9
million in the year ago quarter was due to increases in
operating lease revenue and gain on sale of aircraft, which were
partially offset by a decrease in maintenance reserves revenue in
2015, indicating fewer expirations of long-term leases this
year.
- Total expenses decreased 2.6% to $7.3
million in the second quarter of 2015 as compared to
$7.5 million in the preceding
quarter, primarily due to lower interest costs in the quarter.
Total expenses were down substantially from $13.9 million in the second quarter a year ago,
which included $6.8 million of
non-cash, pre-tax write-downs on certain older aircraft and
$0.5 million of costs associated with
relocating six aircraft following the early termination of the
leases.
- Operating margin expanded to 22.3% in the second quarter from
13.4% in the first quarter of 2015. In the second quarter of 2014,
operating margin was 10.3% excluding the non-cash write-down.
- Net margin expanded to 14.5% in the second quarter from 8.7% in
the first quarter of 2015 and 6.3% in the second quarter of 2014,
excluding the non-cash writedown.
Currently, AeroCentury's portfolio consists of thirty-eight
aircraft, two of which are operating under sales-type finance
leases covering ten different aircraft types and five engines,
compared to forty aircraft, all under operating leases, and five
engines at June 30, 2014. The
current customer base comprises fourteen airlines operating
worldwide.
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.
(see tables following)
AeroCentury
Corp.
Selected Financial
Information
(in thousands, except
share and per share data)
(Unaudited)
|
|
|
|
|
For the Three Months
Ended
|
For the Six Months
Ended
|
|
June 30,
2015
|
March 31,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
Revenues and other
income:
|
|
|
|
|
|
Operating lease
revenue
|
$6,332
|
$6,438
|
$ 5,332
|
$12,770
|
$11,183
|
Net gain on disposal
of assets
|
2,682
|
1,862
|
762
|
4,544
|
1,154
|
Maintenance reserves
revenue (1)
|
262
|
327
|
1,718
|
589
|
3,394
|
Other
income
|
92
|
-
|
67
|
92
|
151
|
|
9,368
|
8,627
|
7,879
|
17,995
|
15,882
|
Expenses:
|
|
|
|
|
|
Depreciation
|
2,322
|
2,328
|
2,013
|
4,650
|
3,878
|
Interest
|
1,468
|
1,878
|
1,261
|
3,346
|
2,568
|
Maintenance
costs
|
1,458
|
1,382
|
1,302
|
2,840
|
3,647
|
Management
fees
|
1,416
|
1,433
|
1,333
|
2,850
|
2,660
|
Professional fees and
other
|
471
|
454
|
1,158
|
923
|
1,793
|
Provision for
impairment in value of
aircraft
|
148
|
-
|
6,800
|
148
|
6,800
|
|
7,283
|
7,475
|
13,867
|
14,757
|
21,346
|
Income/(loss) before
income tax provision
|
2,085
|
1,152
|
(5,988)
|
3,238
|
(5,464)
|
Income tax
provision/(benefit)
|
730
|
400
|
(2,068)
|
1,130
|
(1,913)
|
Net
income/(loss)
|
$1,355
|
$ 752
|
$(3,920)
|
$ 2,108
|
$(3,551)
|
Earnings/(loss) per
share:
|
|
|
|
|
|
Basic
|
$ 0.88
|
$ 0.49
|
$ (2.54)
|
$ 1.37
|
$ (2.30)
|
Diluted
|
$ 0.87
|
$ 0.48
|
$ (2.54)
|
$ 1.36
|
$ (2.30)
|
Weighted average
shares used in earnings/(loss) per
share computations:
|
|
|
|
|
|
Basic
|
1,543,257
|
1,543,257
|
1,543,257
|
1,543,257
|
1,543,257
|
Diluted
|
1,555,088
|
1,552,765
|
1,543,257
|
1,553,904
|
1,543,257
|
|
June 30,
2015
|
March 31,
2015
|
December
31,
2014
|
June 30,
2014
|
Total assets
(2)
|
$196,929
|
$195,355
|
$197,671
|
$178,214
|
Total liabilities
(2)
|
$159,981
|
$159,762
|
$162,830
|
$135,630
|
Stockholders'
equity
|
$ 36,948
|
$ 35,593
|
$ 34,841
|
$ 42,584
|
|
|
(1)
|
Maintenance reserves
revenue is dependent upon the amount of reserves retained upon
lease terminations.
|
(2)
|
Reflects early
adoption and retrospective application of Accounting Standards
Update No. 2015-03, "Interest: Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt
Issuance Costs."
|
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SOURCE AeroCentury Corp.