Relevant Document:
8-K
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AeroCentury today released results for the second quarter of 2021, disclosing that operating lease revenue declined 66% to $1.5 million from $4.4 million during the same period a year earlier. The company attributed the fall to reduced rent income as a result of the sale of aircraft during the fourth quarter of 2020 and first quarter of 2021 as well as reduced rent for three assets in the second quarter of 2021 due to lease extensions and related rent reductions.
EBITDA in the second quarter was negative $2.7 million, compared with negative $8.3 million in the same period a year earlier.
Total operating expenses came to $4.7 million during the second quarter, down 41% from $7.9 million quarter over quarter and down 76% from $19.2 million during the second quarter of 2020.
“During the first quarter of 2021, the Company recorded a bad debt allowance of $0.8 million related to one of its sales-type finance leases as a result of its agreement to sell the aircraft to the customer, which sale closed in the second quarter of 2021,” AeroCentury said in today’s release. “Based on an agreement to sell an aircraft that secures a sales-type finance lease receivable, the Company recorded bad debt expense totaling $0.3 million during the second quarter of 2021. The Company recorded no such expense during the second quarter of 2020.”
AeroCentury added that professional fees and other expenses totaled $0.4 million during the second quarter, a decline of 81% from $1.9 million quarter over quarter and down 85% from $2.4 million during the prior-year period, largely due to decreases in legal fees and consulting related to the May 2020 amendment to the company’s credit facility, litigation brought by an activist shareholder, and amortization related to the company’s office lease right of use.
The company reported $2.7 million in cash and cash equivalents as of June 30, up 12.5% from the $2.4 million reported on Dec. 31, 2020.
According to the company, average portfolio utilization was 81% during the second quarter compared with 86% during the first quarter of this year and 91% in the second quarter of 2020.
AeroCentury said its portfolio comprises six aircraft spread over three different types: three regional jets and two turboprops that are held for sale and are on lease to two customers operating in two countries, in addition to one turboprop that is financed under a sales-type lease.
The company said that it also owns an inventory of spare engine parts that are held for sale, and that with the exception of the aircraft that is subject to a sales-type lease, it reclassified all of its aircraft to be held for sale during the second quarter of 2021 as a result of a sale order approved by the bankruptcy court.