PR Newswire | Nov 19, 2021 05:05PM EST

11/19 16:05 CST

AeroCentury Corp. Reports Third Quarter 2021 Financial Results PALO ALTO, Calif., Nov. 19, 2021

PALO ALTO, Calif., Nov. 19, 2021 /PRNewswire/ -- AeroCentury Corp. ("AeroCentury" or the "Company") (NYSE American: ACY), today announced financial results for its fiscal third quarter ended September 30, 2021.

As previously reported, the Company and its U.S. subsidiaries previously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Court on March 29, 2021. On August 31, 2021, the Bankruptcy Court confirmed the Company's Plan of Reorganization. On September 30, 2021, the Company completed its Chapter 11 restructuring process and emerged from its Chapter 11 bankruptcy.

Financial Highlights:

* Net income in the third quarter of 2021 was $27.5 million as compared to a net loss of $4.1 million in the same period in 2020. * The Company recorded $28.7 million of reorganization gains in the third quarter of 2021. * The Company adopted fresh start reporting adjustments following its emergence from bankruptcy.

Yucheng Hu, the Company's Chief Executive Officer, said: "We are very pleased to announce the Company's financial results for the third quarter of 2021, representing the fresh start for the Company from both from financial and strategic perspectives. After the completion of the Company's reorganization, we look forward to continuing to enjoy a portion of the growth and development of the Company's legacy aircraft leasing business through our majority stake in the Company's previously wholly-owned subsidiary, JetFleet Holding Corp., but we will also be opportunistic and look for additional growth investments in the future to diversify our revenue streams and potential high growth earnings to our shareholders."

Third Quarter 2021 Financial Results

Because the Company's consolidated financial statements reflects fresh start reporting adjustments following its emergence from bankruptcy, any effects of the transactions contemplated by the Plan and Plan Sponsor Agreement, and financial information relating to results of operations, the Company cannot adequately benchmark the operating results of the 1-day period ended September 30, 2021 against any of the previous periods reported in its Condensed Consolidated Financial Statements. As such, the following operating results for the Company's fiscal third quarter is based on the period from July 1, 2021 through September 29, 2021 ("2021 Q3").

* Net income in 2021 Q3 was $27.5 million as compared to a net loss of $4.1 million in 2020 Q3. * Revenues and other income decreased by 54% to $1.6 million in 2021 Q3 from $3.5 million in 2020 Q3, primarily due to a decrease in operating lease revenue and reduced rent for two assets. * In 2021 Q3, the Company had total operating expenses of $2.7 million as compared to $7.0 million in 2020 Q3, primarily comprised of professional fees and administrative expenses and salary and employee benefits, due to no impairment charges after the assets used to settle the liabilities subject to compromise, less interest expense accrued on the Drake Indebtedness after the Company's Chapter 11 filing in late March 2021 and the decreased depreciation expenses.

About AeroCentury: AeroCentury is an independent global aircraft operating lessor and finance company specializing in leasing regional jet and turboprop aircraft and related engines. AeroCentury intends to focus on new lines of business other than the aircraft leasing business going forward.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements that are purely historical are forward-looking statements. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose," and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees for future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting the Company's profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements in this press release and the Company's future results of operations are subject to additional risks and uncertainties set forth under the heading "Factors that May Affect Future Results and Liquidity" in documents filed by the Company with the Securities and Exchange Commission, including the Company's quarterly reports on Form 10-Q and the Company's latest annual report on Form 10-K, and are based on information available to the Company on the date hereof. In addition, such risks and uncertainties include the Company's inability to predict or control bankruptcy proceedings and the uncertainties surrounding the ability to generate cash proceeds through the sale or other monetization of the Company's assets. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.

AeroCentury Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

Successor Predecessor

September 30, September 29, December 31,

2021 2021 2020

Assets:

Cash and cash equivalents $ 10,625,600 $ 10,527,200 $ 2,408,700

Accounts receivable - - 256,600

Finance leases receivable, net 450,000 450,000 2,547,000

Aircraft held for lease, net - - 45,763,100

Property, equipment and furnishings, net - - 14,900

Office lease right of use, net - - 142,400

Deferred tax asset - - 1,150,900

Taxes receivable 1,234,500 1,234,500 -

Prepaid expenses and other assets 1,884,400 1,884,400 255,300

Goodwill 4,688,600 - -

Assets held for sale - 31,149,300 40,838,900

Total assets $ 18,883,100 $ 45,245,400 $ 93,377,800

LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities:

Accounts payable and accrued expenses $ 1,512,100 $ 1,513,700 $ 367,700

Accrued payroll 232,100 232,100 190,100

Notes payable and accrued interest, net - - 88,793,200

Derivative termination liability - - 3,075,300

Lease liability - - 172,000

Maintenance reserves - - 2,000,600

Accrued maintenance costs - - 46,100

Security deposits - - 716,000

Unearned revenues - - 1,027,400

Income taxes payable 19,600 19,600 900

Deferred tax liabilities 114,500 114,500 -

Subscription fee advanced from the Plan Sponsor - 10,953,100 -

Liabilities held for sale - - 14,604,800

Liabilities subject to compromise - 42,029,100 -

Total liabilities 1,878,300 54,862,100 110,994,100

Commitments and contingencies (Note 8)

Stockholders' deficit:

Preferred stock, $0.001 par value, 2,000,000 shares - - -authorized, no shares issued and outstanding

Common stock, $0.001 par value, 10,000,000 sharesauthorized, 4,416,811 and 1,545,884 shares 4,700 1,800 1,800outstanding at September 30, 2021 and December31, 2020

Paid-in capital 17,000,100 16,817,800 16,782,800

Accumulated deficit - (23,399,000) (31,361,600)

Accumulated other comprehensive loss - - (2,000)

17,004,800 (6,579,400) (14,579,000)

Treasury stock at cost, 0 and 213,332 shares at - (3,037,300) (3,037,300)September 30, 2021 and December 31, 2020

Total stockholders' deficit 17,004,800 (9,616,700) (17,616,300)

Total liabilities and stockholders' deficit $ 18,883,100 $ 45,245,400 $ 93,377,800

AeroCentury Corp.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

Successor Predecessor

Period from Three months September July 1, 2021 ended 30, 2021 through September September 30,2020 29, 2021

Revenues and other income:

Operating lease revenue $ - $ 1,546,300 $ 3,249,100

Maintenance reserves revenue, net - 65,100 221,400

Net gain on disposal of assets - - 19,800

Other income - 500 -

- 1,611,900 3,490,300

Expenses:

Impairment in value of aircraft $ - - 439,000

Interest - 1,500 3,020,100

Professional fees, general and administrative and other - 2,001,000 1,370,600

Depreciation - 10,200 1,342,100

Salaries and employee benefits - 448,800 498,800

Insurance - 197,500 191,400

Maintenance - 33,300 78,000

Other taxes - 25,600 26,500

Total operating expenses - 2,717,900 6,966,500

Reorganization gains, net - 28,691,100 -

Gain (loss) before income tax provision - 27,585,100 (3,476,200)

Income tax provision - 76,900 604,900

Net income (loss) $ - $ 27,508,200 $ (4,081,100)

Earnings (Loss) per share:

Basic $ - $ 17.79 $ (2.64)

Diluted $ - $ 17.79 $ (2.64)

Weighted average shares used in loss per sharecomputations:

Basic 4,416,811 1,545,884 1,545,884

Diluted 4,416,811 1,545,884 1,545,884

Net income (loss) - 27,508,200 (4,081,100)

Other comprehensive income/(loss):

Unrealized losses on derivative instruments - - -

Reclassification of net unrealized losses on - - 149,100derivative instruments to interest expense

Tax expense related to items of other comprehensive loss - - (32,400)

Other comprehensive income - - 116,700

Total comprehensive loss $ - $ 27,508,200 $ (3,964,400)

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SOURCE AeroCentury Corp.