AeroCentury Corp (ACY, Financial) filed Quarterly Report for the period ended 2009-09-30.
AeroCentury Corp. was formed to acquire JetFleet Aircraft, L.P. and JetFleet Aircraft II, L.P., in a statutory merger. The company is an operating lessor and finance company which specializes in leasing used turboprop aircraft and engines. The company's aircraft and engines are on lease to regional airlines and commercial users in the U.S., Canada, the U.K., South America and Europe. (PRESS RELEASE) Aerocentury Corp has a market cap of $28.93 million; its shares were traded at around $18.75 with a P/E ratio of 6.7 and P/S ratio of 0.91. Aerocentury Corp had an annual average earning growth of 13.5% over the past 10 years. GuruFocus rated Aerocentury Corp the business predictability rank of 2-star.
At September 30, 2009, the Company also recognized a $196,100 liability for the Swap on its condensed consolidated balance sheet as a component of notes payable and accrued interest, which reflects market expectations concerning the “spread” between fixed and variable interest rates over the remaining term of the Swap. The Company also recognized gains on the Swap of $170,000 and $449,700 for the three months and nine months ended September 30, 2009, respectively, as a component of interest expense for the change in fair value of the Swap contract. Market expectations of increasing interest rates will tend to decrease the fair value of the Swap, and expectations of decreasing interest rates will tend to increase the fair value of the Swap. The term of the Swap ends on December 31, 2009.
As of September 30, 2009, the carrying amount of the Subordinated Notes was $10,529,300 (outstanding principal amount of $11,167,000 less unamortized debt discount of $637,700) and accrued interest payable was $0. The Company is currently, and at September 30, 2009 was, in compliance with all covenants under the securities purchase agreement pursuant to which the Company issued the Subordinated Notes. Based on its current projections, the Company believes it will continue to be in compliance with all covenants of the securities purchase agreement pursuant to which the Company issued the Subordinated Notes, but there can be no assurance of such compliance in the future. See "Factors That May Affect Future Results – 'Risks of Debt Financing and 'Credit Facility Obligations, ” below.
Payments for interest decreased by $961,900 in the first nine months of 2009 compared to the same period of 2008. The Company paid $1,598,100 less interest related to the Company s Credit Facility and special purpose financing debt in the 2009 period compared to the same period in 2008 as a result of lower average outstanding balances and lower average index rates upon which the Credit Facility and special purpose financing interest rates were based. The Company also paid $19,100 more in commitment fees related to the unused portion of its Credit Facility in the 2009 period. The Company paid $45,500 less in commitment fees related to its Subordinated Notes debt in the 2009 period because no such fees were payable after the Company s issuance of Subordinated Notes in July 2008. The aggregate effect of these decreases was partially offset by an increase of $266,700 in interest payments related to the Company s Subordinated Notes in the nine months ended September 30, 2009, compared to the same period in 2008 as a result of a higher average principal balance. During the first nine months of 2009, the Company also paid $395,900 more of net settlement interest related to the Swap than during the 2008 period.
During the nine months ended September 30, 2009 the Company received $1,625,100 of Federal tax refunds and paid taxes of $5,300. The Company received $210,500 of Federal tax refunds and paid taxes of $3,700 in the nine months ended September 30, 2008.
The Company borrowed $4,000,000 and $12,500,000 during the first nine months of 2009 and 2008, respectively. The Company repaid $12,677,000 and $15,223,700 of its outstanding debt in the nine months ended September 30, 2009 and 2008, respectively. Such payments were funded by excess cash flow. In the first nine months of 2008, the Company also issued $4,000,000 of principal amount of Subordinated Notes, the net proceeds of which were used to repay a portion of the Company s Credit Facility debt.
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AeroCentury Corp. was formed to acquire JetFleet Aircraft, L.P. and JetFleet Aircraft II, L.P., in a statutory merger. The company is an operating lessor and finance company which specializes in leasing used turboprop aircraft and engines. The company's aircraft and engines are on lease to regional airlines and commercial users in the U.S., Canada, the U.K., South America and Europe. (PRESS RELEASE) Aerocentury Corp has a market cap of $28.93 million; its shares were traded at around $18.75 with a P/E ratio of 6.7 and P/S ratio of 0.91. Aerocentury Corp had an annual average earning growth of 13.5% over the past 10 years. GuruFocus rated Aerocentury Corp the business predictability rank of 2-star.
Highlight of Business Operations:
The total amount available under the Credit Facility is $80 million. During the nine months ended September 30, 2009, the Company borrowed $4,000,000 and repaid $9,096,000 of the outstanding principal under the Credit Facility. The balance of the principal amount owed under the Credit Facility at September 30, 2009, was $53,000,000 and interest of $35,600 was accrued.At September 30, 2009, the Company also recognized a $196,100 liability for the Swap on its condensed consolidated balance sheet as a component of notes payable and accrued interest, which reflects market expectations concerning the “spread” between fixed and variable interest rates over the remaining term of the Swap. The Company also recognized gains on the Swap of $170,000 and $449,700 for the three months and nine months ended September 30, 2009, respectively, as a component of interest expense for the change in fair value of the Swap contract. Market expectations of increasing interest rates will tend to decrease the fair value of the Swap, and expectations of decreasing interest rates will tend to increase the fair value of the Swap. The term of the Swap ends on December 31, 2009.
As of September 30, 2009, the carrying amount of the Subordinated Notes was $10,529,300 (outstanding principal amount of $11,167,000 less unamortized debt discount of $637,700) and accrued interest payable was $0. The Company is currently, and at September 30, 2009 was, in compliance with all covenants under the securities purchase agreement pursuant to which the Company issued the Subordinated Notes. Based on its current projections, the Company believes it will continue to be in compliance with all covenants of the securities purchase agreement pursuant to which the Company issued the Subordinated Notes, but there can be no assurance of such compliance in the future. See "Factors That May Affect Future Results – 'Risks of Debt Financing and 'Credit Facility Obligations, ” below.
Payments for interest decreased by $961,900 in the first nine months of 2009 compared to the same period of 2008. The Company paid $1,598,100 less interest related to the Company s Credit Facility and special purpose financing debt in the 2009 period compared to the same period in 2008 as a result of lower average outstanding balances and lower average index rates upon which the Credit Facility and special purpose financing interest rates were based. The Company also paid $19,100 more in commitment fees related to the unused portion of its Credit Facility in the 2009 period. The Company paid $45,500 less in commitment fees related to its Subordinated Notes debt in the 2009 period because no such fees were payable after the Company s issuance of Subordinated Notes in July 2008. The aggregate effect of these decreases was partially offset by an increase of $266,700 in interest payments related to the Company s Subordinated Notes in the nine months ended September 30, 2009, compared to the same period in 2008 as a result of a higher average principal balance. During the first nine months of 2009, the Company also paid $395,900 more of net settlement interest related to the Swap than during the 2008 period.
During the nine months ended September 30, 2009 the Company received $1,625,100 of Federal tax refunds and paid taxes of $5,300. The Company received $210,500 of Federal tax refunds and paid taxes of $3,700 in the nine months ended September 30, 2008.
The Company borrowed $4,000,000 and $12,500,000 during the first nine months of 2009 and 2008, respectively. The Company repaid $12,677,000 and $15,223,700 of its outstanding debt in the nine months ended September 30, 2009 and 2008, respectively. Such payments were funded by excess cash flow. In the first nine months of 2008, the Company also issued $4,000,000 of principal amount of Subordinated Notes, the net proceeds of which were used to repay a portion of the Company s Credit Facility debt.
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