Message #2 From:
NewsBot Date: December 29, 2007 09:18:22 PM
Third Quarter Results Announced AeroCentury Corp
AeroCentury Corp.
(Amex: ACY), an independent aircraft leasing company, announced its
operating results for the third quarter ended September 30, 2007. As discussed
and shown in the tables below, comparative information for the third quarter
of 2006 and first nine months of 2006 has been restated in connection with the
Company's adoption of Staff Accounting Bulletin No. 108, Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements ('SAB 108') and Financial Accounting Standard Board
Staff Position AUG AIR-1, Accounting for Planned Major Maintenance Activities
('FSP AUG AIR-1').
For the quarter ended September 30, 2007, the Company reported total
revenues of $6.4 million compared with revenues of $4.6 million for the same
period a year ago. For the nine months ended September 30, 2007, the Company
reported total revenues of $16.4 million compared with revenues of $13.8
million for the same period a year ago.
The Company reported net income of $1,064,000 or $0.69 per basic share and
$0.66 per diluted share for the third quarter of 2007 compared to net income
of $308,000 or $0.20 per basic and diluted share for the third quarter of
2006. The Company reported net income of $2,501,000 or $1.62 per basic share
and $1.58 per diluted share for the nine months ended September 30, 2007
compared to net income of $152,000 or $0.10 per basic and diluted share for
the same period a year ago.
Operating lease revenue was approximately $1,304,000 and $2,128,000 higher
in the three months and nine months ended September 30, 2007, respectively,
versus the same periods in 2006, primarily because of increased operating
lease revenue from aircraft purchased in the fourth quarter of 2006 and first
nine months of 2007 and lease modifications which involved rent increases for
several of the Company's aircraft. In addition, in the three months ended
September 30, 2007, the Company recorded revenue from several aircraft which
had been off lease for part of the same period in 2006. The aggregate effects
of these increases were partially offset by a decrease in revenue related to
aircraft which were off lease for part of the 2007 periods.
Total expenses were approximately $727,000 higher in the three months
ended September 30, 2007, respectively, versus the same period in 2006,
primarily because of increases in interest, depreciation and management fee
expenses as a result of aircraft purchases, and other taxes. Those increases
were partially offset by a decrease in the amount of maintenance expense. The
Company's maintenance expense is dependent on the aggregate maintenance claims
submitted by lessees and expenses incurred in connection with off-lease
aircraft. As a result of lower total lessee claims and less expense incurred
for off-lease aircraft in 2007, the Company incurred approximately $494,000
less in maintenance expense in the three months ended September 30, 2007,
respectively, versus the same period in 2006.
Total expenses were approximately $711,000 less in the nine months ended
September 30, 2007, respectively, versus the same period in 2006, primarily
because of the change in maintenance expense from year to year. As a result of
lower total lessee claims and less expense incurred for off-lease aircraft in
2007, the Company incurred approximately $2,305,000 less in maintenance
expense in the nine months ended September 30, 2007, respectively, versus the
same period in 2006. The decrease in maintenance expense was partially offset
by increases in interest, depreciation, and management fee expenses resulting
from aircraft purchases, as well as increases in professional fees and general
and administrative expenses and other taxes.
Due to the recent adoption of FSP AUG AIR-1, the Company was required to
discontinue the accrue-in-advance method of accounting for planned major
maintenance for financial reporting periods beginning on January 1, 2007. The
Company has adopted the direct expensing method, under which actual costs
incurred are expensed directly when maintenance is performed and the accrual
of non-refundable maintenance reserves from the Company's lessees for planned
major maintenance is reflected as income. Because the net effect of
recognizing income when maintenance reserves are billed and accruing
maintenance expense as incurred within any given period will vary, it is
likely that the new accounting method will result in uneven effects on the
Company's results of operations.
AeroCentury is an aircraft operating lessor and finance company
specializing in leasing regional aircraft and engines utilizing triple net
operating leases. The Company's aircraft and engines are on lease to regional
airlines and commercial users worldwide.
