AeroCentury Corp. Reports Fourth Quarter and Full Year 2004
Results
BURLINGAME, Calif., Jan. 31 /PRNewswire-FirstCall/ -- AeroCentury Corp. (AMEX:ACY), an independent aircraft leasing company, today reported its
operating results for fourth quarter 2004.
For the quarter ended December 31, 2004, the Company reported revenues of $4.0
million compared with revenues of $2.1 million for 2003. For the year ended
December 31, 2004, the Company reported revenues of $10.9 million compared with
revenues of $8.9 million for 2003.
The Company had operating lease revenue of $2.4 million for the fourth quarter
2004 compared to $2.1 million for the same period in 2003. The Company had
operating lease revenue of $9.0 million for the year ended December 31, 2004
compared to $8.8 million for 2003. The changes are primarily because of the
combined effect of increased operating lease revenue from aircraft purchased
during 2004 and the re-lease of an aircraft which had been off lease in 2003.
These increases were partially offset by lower lease rates for several aircraft
in 2004 and a portion of 2003 and the effect of aircraft off lease during the
year 2004.
The Company reported net income of $743,000 or $0.48 per share for the fourth
quarter of 2004 as compared to net income of $26,000 or $0.02 per share for the
fourth quarter of 2003. The Company had net income of $266,000 or $0.17 per
share for the twelve months of 2004 and a net loss for the twelve months of
2003 of ($1,340,000) or ($0.87) per share.
The fourth quarter of 2004 included a gain on sale of aircraft and aircraft
engines of approximately $1,727,000 as a result of the sale of a pool of
twenty-four of the Company's turboprop engines. Net gain on sale of aircraft
and aircraft engines was approximately $1,748,000 for the twelve months ended
December 31, 2004 as a result of the fourth quarter sale of the engines as well
as the sale of an additional engine during the third quarter of 2004, which
resulted in a gain of approximately $172,000, which was partially offset by a
$151,000 loss on sale of a deHavill and DHC-7 aircraft during the third
quarter. There were no sales in 2003.
Other income was approximately $213,000 lower in the three months ended
December 31, 2004 versus the same period in 2003 and approximately $15,000
higher in the twelve months ended December 31, 2004 versus the same period in
2003, as a result of the accounting for one of the Company's notes receivable.
Included in net income for the three-month period of 2004 was an impairment
charge of approximately $193,000 for one aircraft, based on its estimated net
sale proceeds pursuant to an agreement to sell the aircraft in early 2005, and
a net charge of approximately $111,000 related to the allowance on the note
receivable, discussed above. Included in net income for the three months ended
December 31, 2003 was a reversal of a $150,000 bad debt charge in connection
with the end-of-lease return of one of the Company's aircraft.
Included in net income for the year 2004, in addition to the items discussed
above were: (i) charges to maintenance expense, bad debt expense and legal
fees totaling approximately $570,000 in connection with the early return during
the third quarter of two aircraft and (ii) an impairment charge of
approximately $463,000 related to another of the Company's aircraft. Included
in net loss for the year of 2003, in addition to the items discussed above,
were charges to maintenance expense, bad debt expense and legal fees totaling
$2,177,000 in connection with the default by the lessee of two aircraft and a
$250,000 bad debt charge in connection with the end-of-lease return of another
aircraft.
Depreciation was approximately $76,000 and $194,000 higher in the three months
and twelve months ended December 31, 2004 versus the same periods in 2003,
respectively, and management fees were approximately $61,000 and $78,000 higher
in the three-month and twelve-month periods of 2004 compared to 2003,
respectively, primarily because of the purchase of aircraft in 2004, the effect
of which was partially offset by sales of assets.
Interest expense was $145,000 and $480,000 higher in the three-month and
twelve-month periods, respectively, of 2004 versus 2003 primarily as a result
of higher average interest rates arising from a combination of changes in the
Company's credit facility pricing in the third quarter of 2003 and higher
market interest rates upon which the Company's revolving credit facility
variable interest rates are based, the effect of which was partially offset by
a lower average principal balance in 2004.
Maintenance expense was $188,000 higher in the three-month period in 2004
versus 2003 primarily as a result of the Company's periodic review of the
adequacy of its maintenance reserves and because, in 2003, the Company revised
downward its estimate for maintenance on an aircraft. Maintenance expense was
$1,245,000 lower in the twelve-month period in 2004 versus 2003 because, even
though the Company incurred maintenance expense in connection with the early
return of two aircraft in the third quarter of 2004, and incurred additional
expenses in connection with its periodic review and expenses associated with
off-lease aircraft in 2004, the total of those amounts was less than the
maintenance expense incurred in connection with a lessee default in 2003.
Professional fees and general and administrative expenses were approximately
$135,000 lower in the three months ended December 31, 2004 compared to the same
period in 2003 primarily because of lower legal fees related to both the
Company's credit facility and re-lease of aircraft, and a reversal of fees
accrued in connection with the note receivable discussed above. Professional
fees and general and administrative expenses were approximately $10,000 higher
in the twelve months ended December 31, 2004 versus 2003 primarily as a result
of higher accounting fees and fees paid in connection with the note receivable
mentioned above. These increases were partially offset by lower legal fees
related to the Company's credit facility and re-lease of aircraft.
Insurance expense was $18,000 and $35,000 higher in the three-month and
twelve-month periods, respectively, during 2004 as compared to 2003 primarily
as a result of the Company having to provide owner coverage for more off-lease
days in 2004 as compared to 2003. This increase was partially offset by lower
rates per dollar of coverage in 2004 versus 2003.
AeroCentury Corp. Selected Financial Information
(Unaudited) For the For the For the For the
Quarter Ended Quarter Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
Summary of Operations:
Operating
lease revenue $2,431,920 $2,096,020 $8,995,720 $8,764,040
Gain on disposal
of aircraft and
aircraft engines 1,727,080 -- 1,748,140 --
Other income (160,290) 52,580 159,980 145,470 Total revenues 3,998,710 2,148,600 10,903,840 8,909,510 Depreciation 916,560 840,250 3,554,620 3,360,600
Interest 689,980 545,480 2,420,580 1,940,920
Management fees 529,160 467,960 1,988,290 1,909,850
Maintenance 355,810 168,310 846,660 2,091,200
Provision for
impairment 193,350 -- 656,650 --
Insurance expense 102,000 84,360 304,450 269,950
Professional fees
and general and
administrative 32,050 167,060 582,870 572,750
Bad debt expense -- (150,000) 146,750 899,910
2,818,910 2,123,420 10,500,870 11,045,180
Income / (loss)
before taxes 1,179,800 25,180 402,970 (2,135,670)
Tax provision /
(benefit) 436,430 (460) 136,600 (795,370)
Net income /
(loss) $743,370 $25,640 $266,370 $(1,340,300)
Weighted average
common shares
outstanding 1,543,257 1,543,257 1,543,257 1,543,257
Earnings / (loss)
per share $0.48 $0.02 $0.17 $(0.87) December 31, September 30, December 31,
2004 2004 2003
Summary Balance Sheet:
Total assets $83,931,530 $72,726,270 $73,659,210
Total liabilities $65,134,350 $54,672,460 $55,128,400
Shareholders'
equity $18,797,180 $18,053,810 $18,530,810
DATASOURCE: AeroCentury Corp.
CONTACT: Toni Perazzo, Chief Financial Officer of AeroCentury Corp., +1-650-340-1888 Web site: http://www.aerocentury.com/
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