BURLINGAME, Calif.,
March 3, 2015 /PRNewswire/
-- AeroCentury Corp. (NYSE MKT: ACY), an independent aircraft
leasing company, today reported its unaudited operating results for
the fourth quarter and year ended December
31, 2014.
Effective as of January 1, 2014,
the Company adopted an alternate method of accounting for
non-refundable maintenance reserves and certain lessor maintenance
costs. In order to provide a meaningful comparison for 2014
results, the 2013 results stated below and in the accompanying
tables were calculated as if the new method of accounting were in
effect throughout 2013.
In the fourth quarter of 2014, net income was $0.5 million, or $0.32 per diluted share, compared to a net loss
of $0.8 million, or $0.54 per diluted share, for the fourth quarter
of 2013. The Company reported that, primarily as a result of
a total of $18.7 million of non-cash,
pre-tax write-downs of certain aircraft, it had a net loss of
$11.3 million, or $7.32 per diluted share, in 2014, compared to net
income of $8.3 million, or
$5.26 per diluted share, in
2013.
"We are pleased to return to profitability this quarter.
The financial results posted for 2014 were heavily impacted by
$15.6 million of non-cash write-downs
we took in the year on six older aircraft which we have classified
as held for sale," said Neal D.
Crispin, President and Chief Executive Officer. "At
the same time, 2014 was a year of continued strong growth of our
portfolio with the addition of three CRJ-700 and two CRJ-900
mid-life regional jets and one new ATR 42-600 turboprop, all on
long-term leases. These 2014 aircraft acquisitions, together
with the aircraft sales and impairment charges taken on selected
older aircraft, reflect our strategic growth plan to add mid-life
regional jet aircraft and new generation turboprops, while reducing
the older aircraft in our portfolio. With the addition of
these aircraft, we believe that the Company is positioned for
continued operating lease revenue growth. We continue to see
strong lessee demand for larger, mid-life regional jets and
turboprop aircraft to meet forecasted traffic growth throughout the
world."
"As a result of the aircraft acquisitions and aircraft sales
during the year, the average age of the Company's leasing portfolio
at year-end 2014 is about 13 years compared to 18 years at year-end
2013, a 28% decrease in age," Crispin continued. "In
addition, the average remaining lease term for aircraft leases in
place today is approximately 60 months, a 66% increase from
approximately 36 months at the end of 2013."
"By adding new lessees and lease renewals, the Company has been
able to better diversify its lessee credit risk," said Toni M. Perazzo, Chief Financial Officer.
"For 2014, approximately 29% of 2014 operating lease revenue was
derived from lessees in North
America compared to 8% from North American lessees in
2013. In addition, these same lessees accounted for
approximately 35% of the net book value of the Company's leased
aircraft, up from 12% in 2013."
The Company expanded the board from five to six members in
February 2015 with the addition of
Dave Wilson who recently retired
after 21 years from GECAS, the world's largest aircraft leasing
company.
Fourth Quarter 2014 Highlights (at or for the periods
ended December 31, 2014, compared to
December 31, 2013)
Total revenues were $6.2 million
and $28.7 million for the fourth
quarter and year ended December 31,
2014, respectively, compared to total revenues of
$5.6 million and $38.2 million, respectively, for the same periods
a year ago.
Operating lease revenues increased 22% in the fourth quarter and
17% for the year, compared to the same periods a year ago primarily
because of operating lease revenue from aircraft purchased during
the fourth quarter of 2013 and in 2014.
Average portfolio utilization was 82% during 2014, compared to
76% in 2013.
Total expenses decreased 21% to $5.4
million in the fourth quarter of 2014 as compared to the
same period in 2013 primarily as a result of JetFleet Management
Corp.'s one-time waiver of its fourth quarter management fees of
$1.2 million. For the full
year 2014, total expenses were $46.0
million compared to $25.6
million for 2013, primarily due to the non-cash, pre-tax
write-downs totaling $18.7 million on
certain of the Company's older aircraft.
Balance Sheet
The net book value of the Company's portfolio increased by 26%
from $153.7 million at December 31, 2013 to $193.3 million at December
31, 2014. Currently, the Company's portfolio consists of
thirty-nine aircraft and five engines, covering ten different
aircraft types compared to forty-one aircraft and six engines at
December 31, 2013.
The Company's current customer base consists exclusively of
regional carriers – twelve 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.
This press release contains certain statements that may
include "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including the Company's statements regarding
its plan to add mid-life regional jet aircraft and new generation
turboprops, while reducing the older aircraft in our portfolio;
that it is positioned for continued operating lease revenue growth;
and that aircraft traffic is forecasted to grow throughout the
world. All statements, other than statements of historical
fact, included herein are "forward-looking statements."
Although the Company believes that the expectations reflected in
these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Actual results could differ materially
from those anticipated in these forward-looking statements as a
result of a variety of factors, including the availability of
appropriate aircraft for acquisition and financing therefor;
the risks of reduced demand for leased aircraft of the types
in the Company's portfolio; the inability of the Company to lease
certain of its aircraft; or the business failure of one or more of
the Company's lessees; as well as those discussed in the Company's
reports that are filed with the Securities and Exchange
Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Other than as required by law, the Company
does not assume a duty to update any forward-looking
statement.
(see tables following)
AeroCentury
Corp.
Selected Financial
Information
(in thousands, except
share and per share data)
(Unaudited)
|
|
|
For the Three
Months
Ended December
31,
|
For the
Year
Ended December
31,
|
|
2014
|
2013(1)
|
2014
|
2013(1)
|
Revenues and other
income:
|
|
|
|
|
Operating lease
revenue
|
$5,915
|
$ 4,853
|
$ 21,913
|
$18,794
|
Maintenance reserves
revenue (2)
|
-
|
1,044
|
3,394
|
14,911
|
Net gain/(loss) on
disposal of assets
|
183
|
(340)
|
3,147
|
3,808
|
Other
income
|
101
|
75
|
252
|
719
|
|
6,199
|
5,632
|
28,706
|
38,232
|
Expenses:
|
|
|
|
|
Depreciation
|
1,689
|
1,987
|
7,299
|
7,363
|
Maintenance
costs
|
1,659
|
2,079
|
7,478
|
6,962
|
Interest
|
1,341
|
1,041
|
5,134
|
4,075
|
Professional fees and
other
|
510
|
654
|
3,439
|
2,790
|
Provision for
impairment in value of aircraft
|
218
|
-
|
18,737
|
-
|
Management
fees
|
-
|
1,138
|
3,865
|
4,369
|
|
5,417
|
6,899
|
45,952
|
25,559
|
Income/(loss) before
income tax provision
|
782
|
(1,267)
|
(17,246)
|
12,673
|
Income tax
provision/(benefit)
|
278
|
(435)
|
(5,952)
|
4,329
|
Net
income/(loss)
|
$ 504
|
$ (832)
|
$(11,294)
|
$ 8,344
|
Earnings/(loss) per
share:
|
|
|
|
|
Basic
|
$ 0.33
|
$ (0.54)
|
$ (7.32)
|
$ 5.41
|
Diluted
|
$ 0.32
|
$ (0.54)
|
$ (7.32)
|
$ 5.26
|
Weighted average
shares used in earnings/(loss) per share computations:
|
|
|
|
|
Basic
|
1,543,257
|
1,543,257
|
1,543,257
|
1,543,257
|
Diluted
|
1,552,620
|
1,543,257
|
1,543,257
|
1,587,036
|
|
|
Summary Balance Sheet
(Unaudited):
|
December
31,
2014
|
December
31,
2013(1)
|
Total
assets
|
$201,775
|
$164,634
|
Total
liabilities
|
$166,934
|
$118,499
|
Stockholders'
equity
|
$ 34,841
|
$ 46,135
|
|
|
|
|
(1)
|
Effective January 1,
2014, the Company adopted an alternate method of accounting for
maintenance reserves and lessor maintenance obligations to: (i)
recognize non-refundable maintenance reserves as liabilities for
deposits against future maintenance reimbursements of maintenance
reserves received in the normal course of ongoing leases; (ii)
recognize reimbursements from such collected reserves as
disbursements against the liability when claims are submitted for
payment against previously collected maintenance reserves; (iii)
reflect as liabilities non-refundable reserves received by the
prior lessor upon acquisition of an aircraft which are claimable by
the lessee when maintenance is performed; (iv) recognize as income
non-refundable reserves not refunded to lessees upon termination of
the lease and return of the aircraft to the Company in accordance
with all lease return requirements; and (v) record lessor
maintenance obligations as liabilities upon acquisition of an
aircraft subject to a lease under which the Company assumes the
prior lessor's obligation to pay a portion of a first-time
maintenance event. The selected financial information for the three
months and year ended December 31, 2013 and as of December 31, 2013
reflects the retrospective application of the alternate method of
accounting in accordance with ASC 250, Accounting Changes and
Error Corrections.
|
|
(2)
|
Maintenance reserves
revenue is dependent upon the amount of reserves retained upon
lease terminations.
|
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SOURCE AeroCentury Corp.