 BURLINGAME, Calif., Aug. 13, 2020 GLOBE NEWSWIRE -- AeroCentury Corp. AeroCentury or the Company NYSE American: ACY, an independent aircraft leasing company, today reported a second quarter 2020 net loss of 13.5 million, or 8.74 per share, compared to a net loss of 0.1 million, or 0.05 per share, for the second quarter of 2019. In the first six months of 2020, the Company reported a net loss of 23.7 million, or 15.33 per share, compared to a net loss of 1.4 million, or 0.90 per share, in the first six months of 2019.Results for the quarter ended June 30, 2020 included impairment losses totaling 9.7 million. Those losses arise from appraised values for three regional jet aircraft that are held for sale; estimated sales proceeds for an older turboprop aircraft that is held for sale and which the Company expects to sell during the fourth quarter of 2020, and estimated fair value of two regional jet aircraft that are held for lease. Results for the second quarter of 2020 also included 2.0 million of charges arising from the conversion of the Companys revolving credit facility to a term loan in May of 2020, including a 1.5 million write-off of a portion of the Companys unamortized debt issuance costs included in interest expense and 0.5 million of costs that is included in professional fees and other.On May 1, 2020, the Company and the MUFG Credit Facility Lenders MUFG Lenders executed an amendment to the MUFG Credit Facility as amended, the MUFG Loan Agreement to convert the MUFG Credit Facility into a term loan facility as converted, the MUFG Loan. The amendment includes certain requirements and establishment of deadlines for achievement of milestones toward execution of Company strategic alternatives for the Company andor its assets acceptable to the MUFG Lenders. The MUFG Lenders have the right to exercise any and all remedies for default under the MUFG Loan Agreement. Such remedies include, but are not limited to, declaring the entire indebtedness immediately due and payable and, if the Company were unable to repay such accelerated indebtedness, foreclosing upon the assets of the Company that secure the indebtedness under the MUFG Loan, which consist of all of the Companys assets except for certain assets held in the Companys single asset special-purpose financing subsidiaries. On May 20, 2020, JetFleet Management Corp. the PPP Borrower, a subsidiary of AeroCentury Corp., was granted a loan the PPP Loan from American Express National Bank in the aggregate amount of 276,353, pursuant to the Paycheck Protection Program the PPP under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a Note dated May 18, 2020 issued by the PPP Borrower, matures on April 22, 2022 and bears interest at a rate of 1.00 per annum, payable in 18 monthly payments commencing on November 20, 2020. Funds from the PPP Loan may only be used for payroll costs and any payments of certain covered interest, lease and utility payments. The Company intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. No assurance can be provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.During our second quarter, the COVID pandemics impact continued to play out more fully, explained Michael Magnusson, President of AeroCentury Corp. Airlines around the world drastically reduced their operations or ceased operating entirely. Many defaulted on lease payments or demanded rent concessions, Magnusson continued. As a result, aircraft lessors have experienced increasing difficulties meeting financial obligations to their lenders. AeroCentury is no exception. A number of our customers were unable to make rental payments during the second quarter, which dramatically reduced the Companys free cash flow. The pandemic also delayed sales of surplus assets anticipated to close in the second quarter. Finally, the worldwide decrease in demand put significant downward pressure on our aircraft valuations, which required the Company during the last quarter to re-appraise our aircraft and take significant asset value write-offs, which further eroded our performance. All of these factors continued to negatively affect the Companys ability to comply with its debt obligations. Mr. Magnusson continued, To meet the unprecedented impact that the pandemic has had on the Company, we have enacted cost-cutting measures, including reductions in overhead and office space, and we continue to work closely and cooperatively with our defaulting lessees and our lenders to negotiate a workout of our customers lease defaults and to restructure our debt obligations accordingly. Many great challenges lie ahead, but we remain hopeful as we are beginning to see signs of adaptation by airlines and passengers to the post-pandemic world and of a slow but steady recovery of the airline industry.Second Quarter 2020 Highlights and Comparative Data Net loss was 13.5 million compared to a loss of 10.2 million in the preceding quarter and a loss of 0.1 million a year ago. EBITDA1 was 8.3 million compared to 4.7 million in the preceding quarter and 5.3 million a year ago. Average portfolio utilization was 91 during the second quarter of 2020, compared to 83 in the preceding quarter and 99 in the second quarter of 2019. The year-to-year decrease was due to aircraft that were on lease in the 2019 period, but off lease in the 2020 period. Revenues in the second quarter of 2020 and the first six months of 2020 consisted primarily of operating lease revenue. Revenue of 4.4 million in the second quarter of 2020 was 8 less than the 4.8 million in revenue recorded in the first quarter of 2020 as a result of rent concessions granted to one of the Companys customers due to the COVID-19 pandemic. Second quarter operating lease revenue in the current year was 37 lower than the 7.0 million in the second quarter of 2019 primarily due to rent concessions and reduced rent income resulting from the early termination of four aircraft leases with one of the Companys customers in the third quarter of 2019. Total operating expenses increased by 9 to 19.2 million in the second quarter of 2020 from 17.7 million in the preceding quarter, and increased 72 from 7.3 million in the second quarter a year ago. During the second quarter of 2020, the Company recognized asset impairments of 9.7 million as a result of appraised values on three regional jet aircraft held for sale and estimated sales proceeds for three aircraft, one of which is held for sale, compared to the first quarter of 2020 when the Company recognized asset impairments of 6.7 million based on estimated sales proceeds for some of its aircraft. During the second quarter of 2019, the Company recognized a 160,000 asset impairment for an asset held for sale based on a third-party appraised value. Depreciation expense decreased by 8 to 2.0 million in the second quarter of 2020 from 2.2 million in the preceding quarter and decreased by 33 from 3.0 million in the second quarter a year ago, due to the reclassification of several aircraft from held for lease to held for sale during the third quarter of 2019. Interest expense decreased by 26 to 4.5 million in the second quarter of 2020 from 6.0 million in the preceding quarter, primarily due a decrease in non-cash charges and interest related to the Companys interest rate swaps, two of which were terminated during the first quarter of 2020. Such decreases were partially offset by a 1.5 million write-off of a portion of the Companys unamortized debt issuance costs during the second quarter that resulted from the conversion of the Companys revolving credit facility to a term loan in May 2020. Interest expense increased 80 from 2.5 million in the second quarter of 2019, primarily as a result of a higher average interest rate and the write-off discussed above. The Company recorded no bad debt expense during the second quarter of 2020. As a result of payment delinquencies by two customers that leased two of the Companys aircraft subject to finance leases, the Company recorded a bad debt expense of 1.2 million during the first quarter of 2020. The Company recorded no bad debt expense during the first quarter of 2019. Salaries, employee benefits and professional fees and other expenses increased by 78 to 2.9 million from 1.6 million in the second quarter of 2019 and increased 85 from 1.6 million in the first quarter of 2020 primarily due to increased legal fees arising from the May 2020 conversion of the Companys revolving credit facility to a term loan in May 2020 and litigation relating to an activist shareholder, consulting fees related to the May 2020 debt conversion and increased amortization related to the Companys office lease right of use. Book value per share was 0.22 as of June 30, 2020, compared to 8.84 at March 31, 2020 and 24.88 a year ago.1 EBITDA is a non-GAAP measure. See below for its method of calculation and reconciliation to its most directly comparable GAAP measure, as well as other information about the use of non-GAAP measures generally, at the end of this press release.Aircraft and Engine PortfolioAeroCenturys portfolio currently consists of thirteen aircraft, spread over six different aircraft types. Eleven of the aircraft, comprised of nine regional jets and two turboprops, are held for lease. Two additional turboprops are held under sales-type leases. 