ACY

[BigSully1]

 Low float, thin traded, but looks like very good value, and I bought a little today.

AeroCentury Corp.
1440 Chapin Avenue
Suite 310
Burlingame, CA 94010
United States - Map
Phone: 650-340-1888
Fax: 650-696-3929
Web Site: http://www.aerocentury.com

DETAILS   
Index Membership: N/A
Sector: Services
Industry: Rental & Leasing Services
Full Time Employees: NaN


BUSINESS SUMMARY   
AeroCentury Corp. and its subsidiaries invest in used regional aircraft equipment leased to foreign and domestic regional air carriers. It leases regional aircraft and engines, which are used by customers pursuant to triple net operating leases in the United Kingdom, Europe, Asia, the Caribbean, the United States, Canada, Africa, and South America. As of December 31, 2006, the company owned 8 deHavilland DHC-8-300s, 3 deHavilland DHC-8-100s, 3 deHavilland DHC-6s, 14 Fokker 50s, 2 Saab 340As, 6 Saab 340Bs, and 1 turboprop engine. AeroCentury Corp. was founded in 1989 and is based in Burlingame, California.
-----------------------------------------------------------------------------------

AeroCentury Corp. Reports Fourth Quarter 2007 and Full Year 2007 Results and Restated 2006 and 2007 Quarterly Results
Tuesday February 26, 7:01 pm ET


BURLINGAME, Calif., Feb. 26 /PRNewswire-FirstCall/ -- AeroCentury Corp. (Amex: ACY - News), an independent aircraft leasing company, today reported its operating results for the fourth quarter and the year ended December 31, 2007.
ADVERTISEMENT


In connection with the year-end audit of 2007 consolidated financial results, the Audit Committee and management of the Company determined that two $450,000 non-contingent termination payments due from a lessee at lease-end in October 2007 and February 2008, respectively, should have been recognized as operating lease revenue ratably over the three-year term of the leases. As a result of this timing difference, operating lease revenue has been understated by approximately $627,000 cumulatively through December 31, 2006, and by approximately $229,000 for the nine months ended September 30, 2007.

Accordingly, on February 14, 2008, the Board of Directors, in consultation with management of the Company and the Company's independent registered public accounting firm, determined that its previously issued consolidated financial statements for the years ended December 31, 2004, 2005 and 2006 and the quarters ended March 31, 2005, June 30, 2005, September 30, 2005, March 31, 2006, June 30, 2006, September 30, 2006, March 31, 2007, June 30, 2007 and September 30, 2007 should no longer be relied upon because of the error described above. The Company has restated its consolidated financial statements for the 2007 and 2006 quarters, the effects of which are shown in the tables below. The adjustments do not change the total amount of operating lease revenue recognized from the two lease termination payments, only the timing of the recognition of such revenue.

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").

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.

2007 Results

For the quarter ended December 31, 2007, the Company reported total revenues of $7.2 million compared with revenues of $4.9 million for the same period a year ago. For the year ended December 31, 2007, the Company reported revenues of $23.8 million compared with revenues of $18.8 million for 2006.

The Company reported net income of $1,124,000 or $0.73 per basic share and $0.69 per diluted share for the fourth quarter of 2007, compared to net income of $709,000 or $0.46 per basic and diluted share for the fourth quarter of 2006. The Company had net income of $3,775,000 or $2.45 per basic share and $2.36 per diluted share for 2007 versus $1,009,000 or $0.65 per basic and diluted share for 2006.

Operating lease revenue was approximately $1,470,000 and $3,601,000 higher in the fourth quarter and full year of 2007, respectively, versus 2006, primarily because of additional lease revenue from aircraft purchased in the fourth quarter of 2006 and during 2007 and re-leases during 2007 at increased rental rates for several of the Company's aircraft. In addition, in 2007 the Company recorded revenue from several aircraft that were off lease for part of 2006. The aggregate effect of these increases was partially offset by a decrease in revenue related to aircraft that were off lease for part of 2007.

Maintenance reserves income represents non-refundable reserves which are earned based on lessee aircraft usage. As a result of an increase in total aircraft usage in 2007, primarily due to aircraft acquisitions during the year, maintenance reserves income was approximately $751,000 and $1,319,000 higher in the fourth quarter and year ended December 31, 2007, respectively, than in 2006.

Total expenses were approximately $1,994,000 higher in the three months ended December 31, 2007, versus the same period in 2006, primarily because of increases in interest, depreciation and management fee expenses as a result of aircraft purchases, as well as maintenance expense. The Company's maintenance expense is dependent on the aggregate maintenance claims amount submitted by lessees for reimbursement and expenses incurred in connection with off-lease aircraft. As a result of higher total lessee claims and the replacement of a damaged engine on one of the Company's leased aircraft, the Company incurred approximately $721,000 more in maintenance expense in the three months ended December 31, 2007, versus the same period in 2006.

Total expenses were approximately $1,283,000 higher in the year ended December 31, 2007 versus 2006, primarily because of increases in interest, depreciation and management fee expenses, all of which resulted from aircraft purchases during 2006 and 2007, as well as an increase in other taxes. Those increases were partially offset by a decrease in the amount of maintenance expense. As a result of lower total lessee claims and less expense incurred for off-lease aircraft in 2007, the Company incurred approximately $1,584,000 less in maintenance expense in 2007 compared to 2006.

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)
                                   (000's)

                          For the Quarters Ended      For the Years Ended
                         December 31, December 31,  December 31, December 31,
                            2007         2006          2007         2006
                                    (as restated)               (as restated)

    Operating lease
     revenue                $5,600       $4,130      $19,412      $15,811
    Maintenance reserves
     income                  1,483          732        4,310        2,990
    Gain on sale of
     aircraft and
     aircraft engines           97            -           97           34
    Other                       11            4           31            8
                             7,191        4,866       23,850       18,843

    Depreciation             1,890        1,204        5,615        4,692
    Interest                 1,629        1,267        6,260        4,954
    Management fees            856          686        3,017        2,743
    Maintenance              1,094          373        2,395        3,979
    Other taxes                 13            8          327           31
    Professional fees
     and other                 242          192          882          814
                             5,724        3,730       18,496       17,213

    Income before taxes      1,467        1,136        5,354        1,630
    Tax provision              343          427        1,579          621
    Net income              $1,124         $709       $3,775       $1,009
    Earnings per share:
      Basic                  $0.73        $0.46        $2.45        $0.65
      Diluted                $0.69        $0.46        $2.36        $0.65
    Weighted average
     common shares
     outstanding         1,543,257    1,543,257    1,543,257    1,543,257
    Weighted average
     diluted common
     shares outstanding  1,628,501    1,543,257    1,598,516    1,543,257

    Summary Balance Sheet:

                                     December 31,  December 31,
                                        2007          2006
                                                  (as restated)

    Total assets                       $126,653      $97,366
    Total liabilities                   $94,513      $70,558
    Shareholders' equity                $32,140      $26,808



                              AeroCentury Corp.
         Condensed Consolidated Statements of Operations (Unaudited)
                                   (000's)

                               For the Three Months Ended
                       March 31, 2007     June 30, 2007     September 30, 2007
                       (as       (as      (as       (as      (as       (as
                       pre-   restated)   pre-    restated)   pre-   restated)
                     viously             viously            viously
                     reported)          reported)           reported)

    Operating
     lease revenue    $4,207    $4,284    $4,152    $4,228    $5,224    $5,300
    Maintenance
    reserves income      827       827       847       847     1,152     1,152
    Gain on sale
     of aircraft           -         -         -         -         -         -
    Other                  7         7         1         1        12        12
                       5,041     5,118     5,000     5,076     6,388     6,464

    Depreciation       1,235     1,235     1,258     1,258     1,493     1,493
    Interest           1,222     1,222     1,424     1,424     1,724     1,724
    Management fees      683       683       684       684       794       794
    Maintenance          225       225       701       701       375       375
    Other taxes            -        12        14        14       292       292
    Professional fees
     and other           211       199       219       219       218       218
                       3,576     3,576     4,300     4,300     4,896     4,896

    Income before
     taxes             1,465     1,542       700       776     1,492     1,568
    Tax provision        492       518       237       263       428       454
    Net income          $973    $1,024      $463      $513    $1,064    $1,114
    Earnings per
     share:
      Basic            $0.63     $0.66     $0.30     $0.33     $0.69     $0.72
      Diluted          $0.63     $0.66     $0.29     $0.32     $0.66     $0.69

    Weighted
     average
     common shares
     outstanding   1,543,257 1,543,257 1,543,257 1,543,257 1,543,257 1,543,257
    Weighted
     average
     diluted
     common shares
     outstanding   1,543,257 1,543,257 1,601,423 1,601,423 1,618,674 1,618,674



                              AeroCentury Corp.
         Condensed Consolidated Statements of Operations (Unaudited)
                                   (000's)

                                    For the Three Months Ended
                              March 31, 2006            June 30, 2006
                          (as pre-                   (as pre-
                           viously                    viously
                          reported(1))(as restated)reported(1))(as restated)
    Operating lease
     revenue                $3,701       $3,776       $3,833       $3,908
    Maintenance reserves
     income                    792          792          756          756
    Gain on sale of
     aircraft                    -            -           34           34
    Other                       (9)          (9)           4            4
                             4,484        4,559        4,627        4,702

    Depreciation             1,155        1,155        1,160        1,160
    Interest                 1,164        1,164        1,251        1,251
    Management fees            696          696          683          683
    Maintenance              1,092        1,092        1,644        1,644
    Professional fees
     and other                 294          294          174          174
                             4,401        4,401        4,912        4,912

    Income/(loss)
     before taxes               83          158         (285)        (210)
    Tax provision/
     (benefit)                  31           57          (78)         (52)
    Net income/(loss)          $52         $101        $(207)       $(158)
    Earnings/(loss)
     per share:
      Basic                  $0.03        $0.07       $(0.13)      $(0.10)
      Diluted                $0.03        $0.07       $(0.13)      $(0.10)
    Weighted average
     common shares
     outstanding         1,543,257    1,543,257    1,543,257    1,543,257
    Weighted average
     diluted common
     shares outstanding  1,543,257    1,543,257    1,543,257    1,543,257


    (1) Results for the quarters ended March 31, 2006, June 30, 2006 and
        September 30, 2006, as reported in the Company's quarterly reports on
        Form 10-QSB for the quarters ended March 31, 2007, June 30, 2007 and
        September 30, 2007, included the effects of the adoption of SAB 108
        and FSP AUG AIR-1.



                              AeroCentury Corp.
         Condensed Consolidated Statements of Operations (Unaudited)
                                   (000's)

                                    For the Three Months Ended
                             September 30, 2006         December 31, 2006
                                                  (as restated
                          (as pre-                    under
                           viously       (as         FSP AUG       (as
                          reported(1)) restated)     AIR-1(2))   restated)

    Operating lease
     revenue                $3,920       $3,996       $4,053       $4,130
    Maintenance reserves
     income                    710          710          732          732
    Gain on sale of
     aircraft                    -            -            -            -
    Other                       10           10            4            4
                             4,640        4,716        4,789        4,866

    Depreciation             1,173        1,173        1,204        1,204
    Interest                 1,272        1,272        1,267        1,267
    Management fees            677          677          686          686
    Maintenance                869          869          373          373
    Professional fees
     and other                 178          178          200          200
                             4,169        4,169        3,730        3,730

    Income/(loss)
    before taxes               471          547        1,059        1,136
    Tax provision/
     (benefit)                 163          189          401          428
    Net income/(loss)         $308         $358         $658         $708
    Earnings/(loss)
     per share:
      Basic                  $0.20        $0.23       $ 0.43        $0.46
      Diluted                $0.20        $0.23       $ 0.43        $0.46
    Weighted average
     common shares
     outstanding         1,543,257    1,543,257    1,543,257    1,543,257
    Weighted average
    diluted common
    shares outstanding   1,543,257    1,543,257    1,543,257    1,543,257


    (1) Results for the quarters ended March 31, 2006, June 30, 2006 and
        September 30, 2006, as reported in the Company's quarterly reports on
        Form 10-QSB for the quarters ended March 31, 2007, June 30, 2007 and
        September 30, 2007, included the effects of the adoption of SAB 108
        and FSP AUG AIR-1.

    (2) The effects of the Company's adoption of SAB 108 were included in the
        results reported in the Company's Form 8-K filings on February 6, 2007
        and March 9, 2007.



                              AeroCentury Corp.
              Condensed Consolidated Balance Sheets (Unaudited)
                                   (000's)

                       March 31, 2007    June 30, 2007    September 30, 2007
                       (as               (as                (as
                   previously   (as    previously   (as    previously  (as
                    reported) restated)reported) restated) reported) restated)

    Assets:
      Cash and
       cash
       equivalents    $3,131    $3,131   $2,558   $2,558    $2,869    $2,869
      Accounts
       receivable        758     1,461      937    1,716     1,010     1,865
      Aircraft
       and aircraft
       engine held
       for lease,
       net            90,788    90,788  103,358  103,358   114,122   114,122
      Prepaid
       expenses and
       other             887       887    1,461    1,461     1,682     1,682
    Total assets     $95,564   $96,267 $108,314 $109,093  $119,683  $120,538

    Liabilities:
      Notes payable
       and accrued
       interest       54,552    54,552   62,944   62,944    70,886    70,886
      Maintenance
       reserves
       and accrued
       costs           3,837     3,837    4,692    4,692     4,997     4,997
      Deferred
       income taxes    4,584     4,826    4,788    5,056     5,243     5,537
      All other
       liabilities     5,216     5,216    6,496    6,496     8,099     8,099
                      68,189    68,431   78,920   79,188    89,225    89,519

    Stockholders'
     equity:
      Preferred
       stock,
       $0.001 par
       value,
       2,000,000
       shares
       authorized,
       no shares
       issued
       and
       outstanding         -         -        -        -         -         -
      Common stock,
       $0.001 par
       value,
       3,000,000
       shares
       authorized,
       1,606,557
       shares
       issued and
       outstanding         2         2        2        2         2         2
      Paid in
       capital        13,821    13,821   15,377   15,377    15,377    15,377
      Retained
       earnings       14,056    14,517   14,519   15,030    15,583    16,144
                      27,879    28,340   29,898   30,409    30,962    31,523
      Treasury
       stock at
       cost,
       63,300
       shares           (504)     (504)    (504)    (504)     (504)     (504)
      Total
       stockholders'
       equity         27,375    27,836   29,394   29,905    30,458    31,019
                     $95,564   $96,267 $108,314 $109,093  $119,683  $120,538



                              AeroCentury Corp.
              Condensed Consolidated Balance Sheets (Unaudited)
                                   (000's)

                          March 31, 2006              June 30, 2006
                             (as restated               (as restated
                             under SAB 108               under SAB 108
                    (as pre-     and           (as pre-      and
                     viously   FSP AUG   (as    viously    FSP AUG     (as
                      filed)    AIR-1) restated) filed)     AIR-1)   restated)

    Assets:
      Cash and
       cash
       equivalents    $2,220    $2,220  $2,220   $3,420    $3,420    $3,420
      Accounts
       receivable        736       750   1,150      609       624     1,099
      Aircraft and
       aircraft
       engine held
       for lease,
       net            91,940    89,701  89,698   91,294    89,127    89,127
      Aircraft and
       aircraft
       engine held
       for sale,
       net             1,026     1,023   1,026        -         -         -
      Prepaid
       expenses
       and other       1,088     1,088   1,088      759       759       759
    Total assets     $97,010   $94,782 $95,182  $96,082   $93,930   $94,405

    Liabilities:
      Notes
       payable and
       accrued
       interest       58,191    58,191  58,191   57,108    57,108    57,108
      Maintenance
       reserves
       and accrued
       costs          13,481     2,031   2,031   13,282     2,319     2,319
      Deferred
       income taxes    1,100     3,780   3,917    1,140     3,692     3,855
      All other
       liabilities     5,143     5,143   5,143    5,371     5,381     5,381
                      77,915    69,145  69,282   76,901    68,500    68,663

    Stockholders'
     equity:
      Preferred
       stock,
       $0.001 par
       value,
       2,000,000
       shares
       authorized,
       no shares
       issued and
       outstanding         -         -       -        -         -         -
      Common stock,
       $0.001 par
       value,
       3,000,000
       shares
       authorized,
       1,606,557
       shares
       issued and
       outstanding         2         2       2        2         2         2
      Paid in
       capital        13,821    13,821  13,821   13,821    13,821    13,821
      Retained
       earnings        5,776    12,318  12,581    5,862    12,111    12,423
                      19,599    26,141  26,404   19,685    25,934    26,246
      Treasury
       stock at
       cost,
       63,300
       shares           (504)     (504)   (504)    (504)     (504)     (504)
      Total
       stockholders'
       equity         19,095    25,637  25,900  $19,181    25,430   $25,742
                     $97,010   $94,782 $95,182  $96,082   $93,930   $94,405



                              AeroCentury Corp.
              Condensed Consolidated Balance Sheets (Unaudited)
                                   (000's)

                        September 30, 2006          December 31, 2006
                             (as restated
                            under SAB 108               (as restated
                  (as pre-       and           (as pre-     under
                   viously     FSP AUG   (as    viously    FSP AUG     (as
                    filed)      AIR-1) restated) filed)     AIR-1)   restated)

    Assets:
      Cash and
       cash
       equivalents    $3,245    $3,245  $3,245   $3,384    $3,384    $3,384
      Accounts
       receivable        947       965   1,515      864       871     1,498
      Aircraft and
       aircraft
       engine held
       for lease,
       net            90,045    87,951  87,951   93,675    91,902    91,902
      Prepaid
       expenses
       and other         731       731     731      582       582       582
    Total assets     $94,968   $92,892 $93,442  $98,505   $96,739   $97,366

    Liabilities:
      Notes payable
       and accrued
       interest       54,813    54,813  54,813   57,907    57,907    57,907
      Maintenance
       reserves
       and accrued
       costs          13,996     2,970   2,970   14,111     3,168     3,168
      Deferred
       income taxes    1,243     3,855   4,043    1,127     4,256     4,471
      All other
       liabilities     5,516     5,516   5,516    5,012     5,012     5,012
                      75,568    67,154  67,342   78,157    70,343    70,558

    Stockholders' equity:
      Preferred stock,
       $0.001 par
       value,
       2,000,000
       shares
       authorized,
       no shares
       issued and
       outstanding         -         -       -        -         -         -
      Common stock,
       $0.001 par
       value,
       3,000,000
       shares
       authorized,
       1,606,557
       shares
       issued and
       outstanding         2         2       2        2         2         2
      Paid in
       capital        13,821    13,821  13,821   13,821    13,821    13,821
      Retained
       earnings        6,081    12,419  12,781    7,029    13,077    13,489
                      19,904    26,242  26,604   20,852    26,900    27,312
      Treasury stock
       at cost,
       63,300
       shares           (504)     (504)   (504)    (504)     (504)     (504)
      Total
       stockholders'
       equity         19,400    25,738  26,100   20,348    26,396    26,808
                     $94,968   $92,892 $93,442  $98,505   $96,739   $97,366

[buddjas1]

Our watch lists have a lot of overlap, BigSully.