BURLINGAME, Calif., Aug. 10 /PRNewswire-FirstCall/ -- AeroCentury Corp. (AMEX:ACY), an independent aircraft leasing company, today reported its operating results for the second quarter ended June 30, 2006.
For the quarter ended June 30, 2006, the Company reported total revenues of $4.2 million compared with revenues of $2.8 million for the same period a year ago. For the six months ended June 30, 2006, the Company reported revenues of $10.3 million compared with revenues of $5.3 million for the first six months of 2005.
The Company reported net income of $85,600 or $0.06 per share for the second quarter of 2006 compared to net income of $45,900 or $0.03 per share for the second quarter of 2005. The Company had net income of $190,600 or $0.12 per share for the first six months of 2006 versus $85,700 or $0.06 per share for the first six months of 2005.
Operating lease revenue was approximately $1,095,000 and $2,275,000 higher in the three months and six months ended June 30, 2006, respectively, versus the same periods in 2005, primarily because of additional lease revenue from aircraft purchased beginning in April 2005.
Revenue from gain on sale of aircraft was approximately $409,000 for the three months and six months ended June 30, 2006 as a result of the profit from the sale of an aircraft in April 2006 compared to a loss in the prior year.
In the three months and six months ended June 30, 2006, the Company accrued approximately $780,000 and $941,000, respectively, of expense to prepare several aircraft for re-lease. In addition, during the six months ended June 30, 2006, the Company retained non-refundable maintenance reserves when two aircraft were returned at lease end and the Company recorded such amounts as other income. Based on the condition of these two aircraft at the time of return, the Company accrued approximately $2,392,000 of maintenance expense for which the Company is responsible. In the three months and six months ended June 30, 2005, the Company accrued approximately $34,000 and $50,000 of maintenance expense, primarily for the storage of several aircraft.
Interest expense was approximately $434,000 and $836,000 higher in the three months and six months ended June 30, 2006 versus 2005, respectively, primarily as a result of increases in the index upon which the Company's interest rates are based and a higher average principal balance in 2006 compared to 2005, the effect of which was partially offset by a lower margin in 2006 than in 2005.
Depreciation was approximately $251,000 and $556,000 higher in the three months and six months ended June 30, 2006 versus 2005, respectively, and management fees were approximately $118,000 and $272,000 higher in the three months and six months ended June 30, 2006 versus 2005, respectively, primarily because of purchases of aircraft beginning in April 2005, the effect of which was partially offset by the sale of two aircraft, one in November 2005 and the second in April 2006.
The Company's insurance expense consists primarily of insurance for off- lease aircraft, which varies depending on the type of assets insured during each period and the length of time each asset is insured. As a result of the combination of assets insured during each period and the length of time each was insured, insurance expense was approximately $23,000 and $38,000 lower in the three months and six months ended June 30, 2006, respectively, versus the same periods in 2005.
During the first quarter of 2006, the Company recorded bad debt expense of approximately $49,000 for rent receivable which was written off in connection with a lessee's early return of an aircraft. During the second quarter of 2005, the Company recorded bad debt expense of approximately $88,000, to fully reserve the balance of a note receivable a former lessee, based on a notice received from the lessee that it had filed for reorganization.
The Company did not record any impairment charges in the first six months of 2006. In the first six months of 2005, the Company recorded an impairment charge of approximately $12,000 for one of its aircraft, based on the estimated net sale proceeds pursuant to an agreement to sell the aircraft.
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 on lease to regional airlines and commercial users worldwide.
AeroCentury Corp. Selected Financial Information
(Unaudited) Three Months Ended
June 30, March 31, June 30, Annual
2006 2006 2005 % Change
Summary of Operations:
Operating lease revenue $3,833,940 $3,701,000 $2,738,480 40.0%
Gain (Loss) on disposal
of aircraft and
aircraft engines 408,840 -- -- 100.0%
Other income 3,810 2,387,380 16,390 -76.8%
Total revenues 4,246,590 6,088,380 2,754,870 54.1% Interest 1,251,370 1,164,260 817,140 53.1%
Depreciation 1,230,770 1,230,190 980,270 25.6%
Maintenance 779,490 2,553,830 33,820 2,204.8%
Management fees 685,100 698,150 567,140 20.8%
Professional fees and
general and administrative 122,690 166,080 137,470 -10.8%
Insurance expense 51,210 78,040 74,360 -31.1%
Bad debt expense -- 48,820 88,110 -100.0%
Provision for impairment -- -- --
Total expenses 4,120,630 5,939,370 2,698,310 52.7% Income before taxes 125,960 149,010 56,560 122.7% Tax provision 40,360 44,020 10,690 277.5% Net income $85,600 $104,990 $45,870 86.6%
Weighted average common
shares outstanding 1,543,257 1,543,257 1,543,257
Earnings per share $0.06 $0.07 $0.03 100.0% Six Months Ended
June 30, Annual
2006 2005 % Change
Summary of Operations:
Operating lease revenue $7,534,940 $5,260,090 43.2%
Gain (Loss) on disposal
of aircraft and aircraft
engines 408,840 (59,550) 786.5%
Other income 2,391,190 94,470 2,431.2%
Total revenues 10,334,970 5,295,010 95.2% Interest 2,415,630 1,579,860 52.9%
Depreciation 2,460,960 1,905,400 29.2%
Maintenance 3,333,320 50,430 6,509.8%
Management fees 1,383,250 1,111,490 24.5%
Professional fees and
general and administrative 288,770 275,920 4.7%
Insurance expense 129,250 166,970 -22.6%
Bad debt expense 48,820 88,110 -44.6%
Provision for impairment -- 12,180 -100.0%
Total expenses 10,060,000 5,190,360 93.8% Income before taxes 274,970 104,650 162.8% Tax provision 84,380 18,940 345.5% Net income $190,590 $85,710 122.4%
Weighted average common
shares outstanding 1,543,257 1,543,257
Earnings per share $0.12 $0.06 100.0%
Summary Balance Sheet: June 30, 2006 December 31, 2005 June 30, 2005 Total assets $ 96,082,270 $ 96,546,700 $ 84,007,520
Total liabilities $ 76,901,590 $ 77,556,610 $ 65,124,630
Shareholders' equity $ 19,180,680 $ 18,990,090 $ 18,882,890
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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