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

SOURCE AeroCentury Corp.

http://www.aerocentury.com

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