Ms. Perazzo continued, "Consistent with our strategy of modernizing our aircraft portfolio, we recently purchased two 100-seat CRJ-1000 regional jet aircraft manufactured in 2010 on lease to Air Nostrum, one of the leading regional carriers in Europe. On the sale side, we negotiated the sale of two older turboprop aircraft pursuant to sales-type finance leases for delivery in September."Second Quarter 2016 Highlights (at or for the periods ended June 30, 2016, March 31, 2016 and June 30, 2015):
- Average portfolio utilization, as a percentage of net book value of assets held for lease, was 93% during the second quarter of 2016, compared to 95% in the first quarter of 2016, and 90% in the year ago quarter.
- Total revenues were $7.3 million for the second quarter of 2016, compared to $6.2 million in the preceding quarter, and $9.4 million in the second quarter a year ago.
- Operating lease revenues declined 18% to $4.9 million in the second quarter of 2016 from $6.0 million in the preceding quarter, and declined 22% from $6.3 million a year ago, primarily as a result of asset sales in 2015 and the total loss of an aircraft in the second quarter of 2016.
- Insurance proceeds received for the aircraft damaged in the April 2016 accident (no passengers or crew on either aircraft were injured) resulted in a gain on disposal of assets of $2.1 million in the second quarter of 2016.
- One aircraft was sold, pursuant to a sales-type finance lease, generating $42,000 in gains in the second quarter of 2016. Two aircraft were sold on sales-type finance leases during the second quarter of 2015, generating $2.7 million in gains.
- Total expenses increased 23% to $6.8 million in the second quarter of 2016, compared to $5.6 million in the preceding quarter, reflecting higher maintenance. The effects of these increases were partially offset by lower depreciation, interest expense and management fees. Expenses decreased 6% from $7.3 million in the year-ago quarter, due to lower depreciation and management fees, reflecting a decline in portfolio size, and lower interest expense, resulting from a lower credit facility balance during the 2016 period.
- Operating margin and net margin were 6% and 4% respectively, in the second quarter of 2016, compared to 11% and 7% respectively, for the preceding quarter, and 22% and 14% respectively, in the second quarter of 2015.
- Book value per share was $26.81 at June 30, 2016, compared to $26.62 per share at March 31, 2016.
- Liquidity available from the revolving credit facility was $71.2 million at June 30, 2016, up from $48.2 million at March 31, 2016. The credit facility can be expanded by an additional $30.0 million, if needed. The increase in liquidity reflects repayments from excess cash flow and insurance proceeds.
|% of||% of||% of|
|June 30,||book||March 31,||book||June 30,||book|
|Turboprop aircraft (*):|
|Off lease - re-leasing||5||6||%||6||6||%||4||4||%|
|Total turboprop aircraft||14||39||%||16||45||%||23||49||%|
|Regional jet aircraft:|
|Off lease - re-leasing||-||-||-||-||-||-|
|Total regional jet aircraft||8||55||%||8||49||%||8||46||%|
|Off lease - re-leasing||1||2||%||3||1||%||4||2||%|
|(*) Decreases from period to period reflect cash sales, sales pursuant to sales-type finance leases, the accidental loss of an aircraft, and reclassifications of assets to held for sale.|
At June 30, 2016, total assets were $154.3 million, compared to $196.9 million a year ago, reflecting the effect of asset sales during the past twelve months and the accidental loss of one aircraft.AeroCentury is a 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. 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 statement that the Company expects to deliver two aircraft under sales-type finance leases in September. 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 unanticipated events that affect the availability of appropriate aircraft for acquisition and financing therefor and unanticipated increases in interest under the Company's credit facility, and inability to reach acceptable final agreements for the anticipated acquisition, 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.
|Selected Financial Information|
|(in thousands, except share and per share data) (Unaudited)|
|For the Three Months Ended||For the Six Months Ended|
|June 30,||March 31,||June 30,||June 30,||June 30,|
|Operating lease revenue||$||4,935||$||6,044||$||6,332||$||10,980||$||12,770|
|Finance lease revenue||187||5||91||372||91|
|Gain on disposal of assets||2,146||-||-||2,146||460|
|Gain on sales-type finance leases||42||-||2,682||47||4,084|
|Maintenance reserves revenue (1)||-||-||262||-||589|
|Provision for impairment||246||75||148||321||148|
|Professional fees and other||653||524||471||1,178||923|
|Bad debt expense||263||-||-||263||-|
|Income before income taxes||465||685||2,085||1,149||3,238|
|Income tax provision||166||251||730||417||1,130|
|Earnings per share:|
|Shares used in per share computations:|
|(1) Maintenance reserves revenue is dependent upon the amount of reserves retained upon lease terminations.|
Contact:Toni PerazzoActing President and Chief Financial Officer(650) 340-1888