AeroCentury Corp. Reports Second Quarter 2008 Results

    BURLINGAME, Calif., Aug. 12 /EMWNews/ -- AeroCentury Corp.

(Amex: ACY), an independent aircraft leasing company, today reported its

operating results for the second quarter ended June 30, 2008.



    For the quarter ended June 30, 2008, the Company reported total

revenues of $7.7 million compared with revenues of $5.1 million for the

same period a year ago. For the six months ended June 30, 2008, the Company

reported total revenues of $15.5 million compared with revenues of $10.2

million for the same period in 2007.



    The Company reported net income of $1,585,000 or $1.03 per basic share

and $0.99 per diluted share for the second quarter of 2008, compared to net

income of $513,000 or $0.33 per basic share and $0.32 per diluted share for

the second quarter of 2007. The Company reported net income of $1,881,000

or $1.22 per basic share and $1.17 per diluted share for the first six

months of 2008, compared to net income of $1,537,000 or $1.00 per basic

share and $0.98 per diluted share for the first six months of 2007.



    Operating lease revenue was approximately $1.5 million and $3.1 million

higher in the three months and six months ended June 30, 2008,

respectively, versus the same periods in 2007, primarily because of lease

revenue from additional aircraft purchased during 2007 and 2008 and

re-leases during 2007 at increased rental rates for several of the

Company's aircraft. The aggregate effect of these increases was partially

offset by a decrease in revenue related to aircraft that were off lease for

all or part of the 2008 periods.



    Maintenance reserves income, comprised of non-refundable reserves which

are earned based on lessee aircraft usage, was approximately $1.1 million

and $2.0 million higher in the three months and six months ended June 30,

2008, respectively, versus the three months and six months ended June 30,

2007 as a result of the acquisition of additional aircraft in 2007.



    Total expenses were approximately $1.0 million and $4.8 million higher

in the three months and six months ended June 30, 2008, respectively, as

compared to the same periods in 2007, primarily because of higher

maintenance expense of approximately $0.5 million and $2.7 million,

respectively, due to higher total lessee reserves claims. Depreciation was

also higher by approximately $0.5 million and $1.0 million in the three

months and six months ended June 30, 2008, respectively, versus the same

periods in 2007 as a result of aircraft purchases in 2007 and 2008.

Interest expense was approximately $0.3 million lower in the three-month

period of 2008 as compared to the same period in 2007, primarily as a

result of the change in fair value of the Company's interest rate swap.

Interest expense was approximately $0.6 million higher in the six months

ended June 30, 2008 than in the six months ended June 30, 2007, primarily

as a result of higher average senior and subordinated debt balances, the

effect of which was partially offset by a decrease in the average rates

applicable to the Company's senior debt.



    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.






                           (See tables following.)







                              AeroCentury Corp.

                        Selected Financial Information

                                 (Unaudited)

                                   (000's)



                                       For the Three

                                          Months         For the Six Months

                                      Ended June 30,       Ended June 30,

                                    2008      2007        2008       2007

                                          (as restated)          (as restated)



    Revenues and other income:



    Operating lease revenue        $5,759    $4,228     $11,653     $8,511

    Maintenance reserves income     1,901       847       3,650      1,674

    Gain on sale of aircraft and

     aircraft engines                   -         -          15          -

    Other                              25         1         190          9



                                    7,685     5,076      15,508     10,194

    Expenses:



    Interest                        1,101     1,424       3,230      2,646

    Depreciation                    1,743     1,258       3,450      2,493

    Management fees                   889       684       1,772      1,367

    Maintenance costs               1,253       701       3,635        926

    Professional fees and general

     and administrative               157       174         435        331

    Other taxes                        35        10         (45)        22

    Insurance                          93        49         171         75

    Bad debt expense                    -         -           -         16



                                    5,271     4,300      12,648      7,876



    Income before income taxes      2,414       776       2,860      2,318



    Income tax provision              829       263         979        781



    Net income                     $1,585      $513      $1,881     $1,537



    Earnings per share:

      Basic                         $1.03     $0.33       $1.22      $1.00

      Diluted                       $0.99     $0.32       $1.17      $0.98

    Shares used in per share

     computations:



      Basic                     1,543,257 1,543,257   1,543,257  1,543,257



      Diluted                   1,594,410 1,601,423   1,610,969  1,572,502







Summary Balance Sheet:



                                           June 30,  December 31,  June 30,

                                              2008       2007        2007

                                                                 (as restated)



    Total assets                           $136,928    $126,653   $109,093

    Total liabilities                      $102,907     $94,513    $79,188

    Shareholders' equity                    $34,021     $32,140    $29,905