PRESS RELEASE
ERA GROUP INC. REPORTS
FOURTH QUARTER AND FULL YEAR 2014 RESULTS
Houston, Texas
March 10, 2015
FOR IMMEDIATE RELEASE — Era Group Inc. (NYSE: ERA) today reported net income for its fourth quarter ended December 31, 2014 of $3.2 million, or $0.16 per diluted share, on operating revenues of $74.7 million compared to net income of $1.8 million, or $0.09 per diluted share, on operating revenues of $76.0 million in the prior year quarter. The Company also reported net income for its fiscal year ended December 31, 2014 of $17.1 million, or $0.84 per diluted share, on operating revenues of $331.2 million compared to net income of $18.7 million, or $0.88 per diluted share, on operating revenues of $299.0 million in the prior fiscal year.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $18.6 million in the current quarter compared to $20.0 million in the prior year quarter. There were no significant gains on equipment dispositions in the current quarter compared to gains on asset dispositions of $0.5 million in the prior year quarter. EBITDA in the current quarter included $1.9 million of foreign currency losses compared to foreign currency gains of $0.2 million in the prior year quarter.
Fiscal year 2014 EBITDA was $85.9 million compared to EBITDA of $93.1 million in the prior fiscal year. EBITDA adjusted to exclude gains on asset dispositions and special items was $84.7 million in the current year compared to $77.0 million in the prior year. The Company sold helicopters and related equipment for gains of $6.1 million in the current year compared to gains of $18.3 million in the prior year. Special items in the current year consisted of $2.5 million in severance-related expenses for the Company’s former Chief Executive Officer and a $2.5 million impairment charge related to a probable loss of a note receivable. Special items in the prior year consisted of a $2.0 million charge related to the early termination of operating leases on certain helicopters configured for air medical services and $0.2 million of management fees charged prior to the Spin-off from SEACOR Holdings Inc.
“Era achieved record financial results in fiscal year 2014 as revenues and Adjusted EBITDA excluding gains on asset sales increased by 11% and 10%, respectively, over the prior fiscal year,” said Chris Bradshaw, Chief Executive Officer of Era Group. “However, fourth quarter results were weaker than the normal seasonal pattern primarily due to lower utilization of helicopters in our oil and gas line of service, as anticipated in our third quarter earnings announcement.”
“In response to the significant decline in oil prices, oil and gas companies have announced substantial reductions in their spending plans for 2015, and many of them are seeking cost reductions from their service providers. The strength of our business model and balance sheet put us in a good position to weather market downturns of this nature. We are focused on maximizing the utilization of our helicopter fleet through new contract awards and fleet management initiatives.”
“We also remain focused on realizing operational efficiencies in our business. We announced a management realignment and reduction in force during the fourth quarter which streamlined our organization and significantly reduced our personnel expenses. In addition, we plan to extract efficiencies from other areas of our cost structure during 2015.”
Fourth Quarter Results
Operating revenues were $1.3 million lower in the current quarter primarily due to the conclusion of contracts subsequent to the prior year quarter in our international oil and gas and air medical service lines. These decreases were partially offset by increased revenues from search and rescue activities due to higher rates and increased dry-leasing revenues due to improved cash collections from a customer in India and the related change to accrual basis accounting for recognizing revenue from that customer.
Operating expenses were $0.6 million higher in the current quarter primarily due to increased repairs and maintenance expense related to increased flight hours for our EC225 heavy helicopters.
Administrative and general expenses were $0.9 million lower in the current quarter primarily due to the recovery of a previously reserved account receivable from a customer in bankruptcy.
Depreciation expense was $0.7 million higher in the current quarter primarily due to depreciation on new helicopters placed into service.
Interest expense was $0.8 million lower in the current quarter primarily due to increased capitalized interest related to deposits on helicopter orders and a base expansion project.
Derivative gains of $0.8 million in the current quarter were primarily due to a reduction in the amount of unsettled forward currency contracts.
Foreign currency losses of $1.9 million in the current quarter were primarily due to the strengthening of the U.S. dollar resulting in losses on the translation of euro-denominated cash balances and realized losses on forward currency contracts.
Income tax expense was $2.9 million lower in the current quarter primarily due to lower pre-tax income and adjustments related to the state apportionment rates.
Equity earnings were $0.4 million in the current quarter compared to losses of $0.9 million in the prior year quarter. The increase in earnings was due to higher income from our Dart Holding Company Ltd. joint venture.
Sequential Quarter Results
Net income for the current quarter was $1.1 million lower than in the third quarter of 2014. EBITDA was $3.8 million lower in the current quarter compared to the preceding quarter. EBITDA adjusted to exclude gains on asset dispositions and special items was $18.6 million in the current quarter compared to $24.8 million in the preceding quarter. Special items in the third quarter consisted of $2.5 million in severance-related expenses for the Company’s former Chief Executive Officer.
Operating revenues in the current quarter were $15.8 million lower compared to the preceding quarter primarily due to lower utilization of helicopters in our oil and gas line of service and the end of seasonal activities in Alaska. Operating expenses were $8.5 million lower primarily due to reduced repairs and maintenance and fuel expenses resulting from decreased activity and lower fuel prices, as well as reduced personnel expenses resulting from the reduction in headcount during the fourth quarter. Administrative and general expenses were $3.3 million lower due to the absence of severance-related expenses for the former CEO noted above and the recovery of a previously reserved account receivable from a customer in bankruptcy.
Full Year Results
Operating revenues were $32.3 million higher in the current year primarily due to our EC225 heavy helicopters operating for the full year in 2014 compared to a partial year in 2013 and an increase in charter activity at higher rates for our medium helicopters operating in the U.S. Gulf of Mexico. These increases were partially offset by lower revenues from oil and gas activities in Alaska primarily due to a smaller fleet count and reduced utilization.
Operating expenses were $17.8 million higher in the current year primarily due to increased repairs and maintenance and fuel expenses related to the resumption of our EC225 helicopter operations, increased personnel expenses related to pay scale and benefit adjustments and increased rebillable expenses, freight expenses and parts cost of sales. These increases were partially offset by decreases in leased-in equipment expenses due to a one-time charge in the prior year related to operating leases on certain helicopters configured for air medical services and reduced insurance and loss reserves due to changes in insured helicopter values.
Administrative and general expenses were $5.1 million higher in the current year primarily due to severance-related expenses resulting from changes in senior management positions and annual salary adjustments and stock compensation grants.
During the current year, the Company sold or otherwise disposed of helicopters and other equipment for proceeds of $7.1 million, resulting in gains of $6.1 million, compared to proceeds from helicopter and equipment sales of $65.2 million and gains of $18.3 million in the prior year.
Interest expense was $3.3 million lower in the current year primarily due to increased capitalized interest related to deposits on helicopter orders and a base expansion project.
Note receivable impairments were $2.5 million in the current year related to a probable loss of a note receivable.
Foreign currency losses of $2.4 million in the current year were primarily due to the strengthening of the U.S. dollar resulting in losses on the translation of euro-denominated cash balances and realized losses on forward currency contracts.
Income tax expense was $3.4 million lower in the current year due to lower pre-tax income and a lower effective tax rate.
Equity earnings were $1.8 million higher in the current year primarily due to a gain recognized on the sale of our 51% interest in our Lake Palma S.L. joint venture.
Fleet Update
During the current quarter, the Company’s capital expenditures were $42.8 million, which consisted primarily of deposits on future helicopter deliveries and a base expansion project. The Company made a $22.7 million progress payment on a S92 heavy helicopter during the fourth quarter of 2014 and accelerated the delivery date to August 2015. The Company records helicopter acquisitions in property and equipment and places helicopters in service once all completion work has been finalized and the helicopters are ready for use.
The current excess capacity of our medium helicopters is higher than in recent periods. Excess helicopters include our helicopters other than those under customer contracts, undergoing maintenance or dedicated for charter activity. A decline in the near-term utilization of our medium helicopters may adversely impact our near-term financial results. We have recently been awarded a number of new contracts in the U.S. Gulf of Mexico and Brazil. Some of those contracts have already begun, but most of them are not scheduled to begin until the second half of 2015 or early 2016. In addition, we may sell certain helicopters on an opportunistic basis consistent with our stated strategy.
Capital Commitments
The Company’s unfunded capital commitments as of December 31, 2014 consisted primarily of orders for helicopters and totaled $232.3 million, of which $114.9 million is payable during 2015 with the balance payable through 2017. The Company also had $1.9 million of deposits paid on options not yet exercised. The Company may terminate $131.3 million of its total commitments (inclusive of deposits paid on options not yet exercised) without further liability other than liquidated damages of $8.7 million in the aggregate.
Included in these capital commitments are agreements to purchase ten AW189 heavy helicopters, four S92 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered in 2015 through 2017. The S92 helicopters are scheduled to be delivered in 2015 through 2016. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company had outstanding options to purchase up to an additional ten AW189 helicopters, five S92 helicopters and one AW139 medium helicopter. If these options are exercised, the helicopters would be scheduled for delivery in 2015 through 2018.
Liquidity
As of December 31, 2014, the Company had $40.9 million in cash balances and remaining availability under its senior secured revolving credit facility of $214.3 million.
Conference Call
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, March 11, 2015 to review the results for the fourth quarter ended December 31, 2014. The conference call can be accessed as follows:
All callers will need to reference the access code 85831106
Within the U.S.: Operator Assisted Toll-Free Dial-In Number: (866) 607-0535
Outside the U.S.: Operator Assisted International Dial-In Number: (832) 445-1827
Replay
A telephone replay will be available through March 25, 2015 and may be accessed by calling (855) 859-2056 for domestic callers or (404) 537-3406 for international callers. An audio replay will also be available on the Company’s website at www.eragroupinc.com shortly after the call and will be accessible for approximately 90 days.
About Era Group
Era Group is one of the largest helicopter operators in the world and the longest serving helicopter transport operator in the U.S. In addition to servicing its U.S. customers, Era Group also provides helicopters and related services to customers and third-party helicopter operators in other countries, including Brazil, India, Norway, Spain, and the United Kingdom. Era Group’s helicopters are primarily used to transport personnel to, from and between offshore installations, drilling rigs and platforms.
Forward-Looking Statements Disclosure
Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others, the Company’s dependence on, and the cyclical nature of, offshore oil and gas exploration, development and production activity; fluctuations in worldwide prices of and demand for oil and natural gas; the Company’s reliance on a small number of customers and reduction of the Company’s customer base resulting from consolidation; inherent risks in operating helicopters; the failure to maintain an acceptable safety record; the ability to successfully expand into other geographic and helicopter service markets; the impact of increased United States (“U.S.”) and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities; the requirement to engage in competitive processes or expend significant resources with no guaranty of recoupment; the grounding of all or a portion of our fleet for extended periods of time or indefinitely; reduction or cancellation of services for government agencies; reliance on a small number of helicopter manufacturers and suppliers; political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of our assets or result in claims of a force majeure situation; declines in the global economy and financial markets; foreign currency exposure and exchange controls; credit risk exposure; the ongoing need to replace aging helicopters; the Company’s reliance on the secondary used helicopter market to dispose of older helicopters; the Company’s reliance on information technology; allocation of risk between the Company and its customers; liability, legal fees and costs in connection with providing emergency response services; risks associated with the Company’s debt structure; operational and financial difficulties of the Company’s joint ventures and partners; conflict with the other owners of the Company’s non-wholly owned subsidiaries and other equity investees; adverse results of legal proceedings; adverse weather conditions and seasonality; adequacy of insurance coverage; the attraction and retention of qualified personnel; restrictions on the amount of foreign ownership of the Company’s common stock; the effect of the Spin-off, and; and various other matters and factors, many of which are beyond the Company’s control. In addition, these statements constitute Era Group's cautionary statements under the Private Securities Litigation Reform Act of 1995. It is not possible to predict or identify all such factors. Consequently, the foregoing should not be considered a complete discussion of all potential risks or uncertainties. The words "estimate," "project," "intend," "believe," "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. Era Group disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in Era Group's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this release should be evaluated together with the many uncertainties that affect the Company's businesses, particularly those mentioned under "Risk Factors" in Era Group's Annual Report on Form 10-K for the year ended December 31, 2014, in Era Group's subsequent Quarterly Reports on Form 10-Q and in Era Group's current reporting on Form 8-K (if any), which are incorporated by reference.
For additional information concerning Era Group, contact Benjamin Slusarchuk at (281) 606-4782 or visit EraGroup’s website at www.eragroupinc.com.
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) |
| | | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Year Ended
December 31, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| | (unaudited) | | | | |
Operating revenues | | $ | 74,689 |
| | $ | 75,998 |
| | $ | 331,222 |
| | $ | 298,959 |
|
Costs and expenses: | | | | | | | | |
Operating | | 45,772 |
| | 45,213 |
| | 204,373 |
| | 186,612 |
|
Administrative and general | | 9,647 |
| | 10,562 |
| | 43,987 |
| | 38,924 |
|
Depreciation | | 11,854 |
| | 11,129 |
| | 46,312 |
| | 45,561 |
|
Total costs and expenses | | 67,273 |
| | 66,904 |
| | 294,672 |
| | 271,097 |
|
Gains on asset dispositions, net | | 29 |
| | 464 |
| | 6,101 |
| | 18,301 |
|
Operating income | | 7,445 |
| | 9,558 |
| | 42,651 |
| | 46,163 |
|
Other income (expense): | | | | | | | | |
Interest income | | 122 |
| | 139 |
| | 540 |
| | 591 |
|
Interest expense | | (3,556 | ) | | (4,311 | ) | | (14,778 | ) | | (18,050 | ) |
SEACOR management fees | | — |
| | — |
| | — |
| | (168 | ) |
Derivative gains (losses), net | | 800 |
| | (26 | ) | | (944 | ) | | (104 | ) |
Note receivable impairment | | — |
| | — |
| | (2,457 | ) | | — |
|
Foreign currency gains (losses), net | | (1,856 | ) | | 233 |
| | (2,377 | ) | | 698 |
|
Other, net | | (14 | ) | | — |
| | (4 | ) | | 19 |
|
Total other income (expense) | | (4,504 | ) | | (3,965 | ) | | (20,020 | ) | | (17,014 | ) |
Income before income tax expense and equity earnings (losses) | | 2,941 |
| | 5,593 |
| | 22,631 |
| | 29,149 |
|
Income tax expense | | 155 |
| | 3,036 |
| | 8,285 |
| | 11,727 |
|
Income before equity earnings (losses) | | 2,786 |
| | 2,557 |
| | 14,346 |
| | 17,422 |
|
Equity earnings (losses), net of tax | | 354 |
| | (880 | ) | | 2,675 |
| | 882 |
|
Net income | | 3,140 |
| | 1,677 |
| | 17,021 |
| | 18,304 |
|
Net loss attributable to non-controlling interest in subsidiary | | 45 |
| | 75 |
| | 96 |
| | 401 |
|
Net income attributable to Era Group Inc. | | 3,185 |
| | 1,752 |
| | 17,117 |
| | 18,705 |
|
Accretion of redemption value on Series A preferred stock | | — |
| | — |
| | — |
| | 721 |
|
Net income attributable to common shares | | $ | 3,185 |
| | $ | 1,752 |
| | $ | 17,117 |
| | $ | 17,984 |
|
| | | | | | | | |
Basic earnings per common share | | $ | 0.16 |
| | $ | 0.09 |
| | $ | 0.84 |
| | $ | 0.88 |
|
Diluted earnings per common share | | $ | 0.16 |
| | $ | 0.09 |
| | $ | 0.84 |
| | $ | 0.88 |
|
| | | | | | | | |
Weighted average common shares outstanding, basic | | 20,173,583 |
| | 19,924,708 |
| | 20,073,378 |
| | 20,299,854 |
|
Weighted average common shares outstanding, diluted | | 20,232,025 |
| | 19,991,868 |
| | 20,139,581 |
| | 20,344,782 |
|
| | | | | | | | |
EBITDA | | $ | 18,583 |
| | $ | 20,014 |
| | $ | 85,856 |
| | $ | 93,051 |
|
Adjusted EBITDA | | $ | 18,583 |
| | $ | 20,014 |
| | $ | 90,775 |
| | $ | 95,264 |
|
Adjusted EBITDA excluding Gains | | $ | 18,554 |
| | $ | 19,550 |
| | $ | 84,674 |
| | $ | 76,963 |
|
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts) |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 |
Operating revenues | | $ | 74,689 |
| | $ | 90,510 |
| | $ | 86,580 |
| | $ | 79,443 |
| | $ | 75,998 |
|
Costs and expenses: | | | | | | | | | | |
Operating | | 45,772 |
| | 54,282 |
| | 54,679 |
| | 49,640 |
| | 45,213 |
|
Administrative and general | | 9,647 |
| | 12,941 |
| | 10,065 |
| | 11,334 |
| | 10,562 |
|
Depreciation | | 11,854 |
| | 11,746 |
| | 11,425 |
| | 11,287 |
| | 11,129 |
|
Total costs and expenses | | 67,273 |
| | 78,969 |
| | 76,169 |
| | 72,261 |
| | 66,904 |
|
Gains on asset dispositions, net | | 29 |
| | 42 |
| | 3,139 |
| | 2,891 |
| | 464 |
|
Operating income | | 7,445 |
| | 11,583 |
| | 13,550 |
| | 10,073 |
| | 9,558 |
|
Other income (expense): | | | | | | | | | | |
Interest income | | 122 |
| | 130 |
| | 143 |
| | 145 |
| | 139 |
|
Interest expense | | (3,556 | ) | | (3,629 | ) | | (3,840 | ) | | (3,753 | ) | | (4,311 | ) |
SEACOR management fees | | — |
| | — |
| | — |
| | — |
| | — |
|
Derivative gains (losses), net | | 800 |
| | (1,703 | ) | | (11 | ) | | (30 | ) | | (26 | ) |
Note receivable impairment | | — |
| | — |
| | (2,457 | ) | | — |
| | — |
|
Foreign currency gains (losses), net | | (1,856 | ) | | (485 | ) | | 21 |
| | (57 | ) | | 233 |
|
Other, net | | (14 | ) | | (3 | ) | | 13 |
| | — |
| | — |
|
Total other income (expense) | | (4,504 | ) | | (5,690 | ) | | (6,131 | ) | | (3,695 | ) | | (3,965 | ) |
Income before income tax expense and equity earnings (losses) | | 2,941 |
| | 5,893 |
| | 7,419 |
| | 6,378 |
| | 5,593 |
|
Income tax expense | | 155 |
| | 2,868 |
| | 2,759 |
| | 2,503 |
| | 3,036 |
|
Income before equity earnings (losses) | | 2,786 |
| | 3,025 |
| | 4,660 |
| | 3,875 |
| | 2,557 |
|
Equity earnings (losses), net of tax | | 354 |
| | 1,286 |
| | 536 |
| | 499 |
| | (880 | ) |
Net income | | 3,140 |
| | 4,311 |
| | 5,196 |
| | 4,374 |
| | 1,677 |
|
Net loss attributable to non-controlling interest in subsidiary | | 45 |
| | (45 | ) | | 25 |
| | 71 |
| | 75 |
|
Net income attributable to Era Group Inc. | | $ | 3,185 |
| | $ | 4,266 |
| | $ | 5,221 |
| | $ | 4,445 |
| | $ | 1,752 |
|
| | | | | | | | | | |
Basic earnings per common share | | $ | 0.16 |
| | $ | 0.21 |
| | $ | 0.26 |
| | $ | 0.22 |
| | $ | 0.09 |
|
Diluted earnings per common share | | $ | 0.16 |
| | $ | 0.21 |
| | $ | 0.26 |
| | $ | 0.22 |
| | $ | 0.09 |
|
| | | | | | | | | | |
Weighted average common shares outstanding, basic | | 20,173,583 |
| | 20,098,239 |
| | 20,066,060 |
| | 19,952,930 |
| | 19,924,708 |
|
Weighted average common shares outstanding, diluted | | 20,232,025 |
| | 20,163,990 |
| | 20,134,474 |
| | 20,025,135 |
| | 19,991,868 |
|
| | | | | | | | | | |
EBITDA | | $ | 18,583 |
| | $ | 22,424 |
| | $ | 23,077 |
| | $ | 21,772 |
| | $ | 20,014 |
|
Adjusted EBITDA | | $ | 18,583 |
| | $ | 24,886 |
| | $ | 25,534 |
| | $ | 21,772 |
| | $ | 20,014 |
|
Adjusted EBITDA excluding Gains | | $ | 18,554 |
| | $ | 24,844 |
| | $ | 22,395 |
| | $ | 18,881 |
| | $ | 19,550 |
|
ERA GROUP INC. OPERATING REVENUES BY LINE OF SERVICE (unaudited, in thousands) |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 |
Oil and gas:(1) | | | | | | | | | | |
U.S. Gulf of Mexico | | $ | 45,837 |
| | $ | 52,870 |
| | $ | 51,715 |
| | $ | 49,141 |
| | $ | 45,435 |
|
Alaska | | 6,496 |
| | 7,984 |
| | 9,305 |
| | 6,197 |
| | 6,885 |
|
International | | 183 |
| | 1,514 |
| | 173 |
| | 1,245 |
| | 1,228 |
|
Total oil and gas | | 52,516 |
| | 62,368 |
| | 61,193 |
| | 56,583 |
| | 53,548 |
|
Dry-leasing | | 11,911 |
| | 12,392 |
| | 11,466 |
| | 10,876 |
| | 11,566 |
|
Search and rescue | | 5,650 |
| | 5,666 |
| | 5,095 |
| | 6,152 |
| | 5,417 |
|
Air medical services | | 2,301 |
| | 2,569 |
| | 3,137 |
| | 3,091 |
| | 3,135 |
|
Flightseeing | | — |
| | 4,043 |
| | 2,946 |
| | — |
| | — |
|
Fixed Base Operations | | 2,403 |
| | 3,562 |
| | 2,858 |
| | 2,842 |
| | 2,434 |
|
Eliminations | | (92 | ) | | (90 | ) | | (115 | ) | | (101 | ) | | (102 | ) |
| | $ | 74,689 |
| | $ | 90,510 |
| | $ | 86,580 |
| | $ | 79,443 |
| | $ | 75,998 |
|
FLIGHT HOURS BY LINE OF SERVICE(2) (unaudited) |
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 |
Oil and gas:(1) | | | | | | | | | | |
U.S. Gulf of Mexico | | 8,514 |
| | 10,594 |
| | 11,065 |
| | 9,447 |
| | 10,304 |
|
Alaska | | 560 |
| | 939 |
| | 1,122 |
| | 682 |
| | 895 |
|
International | | — |
| | — |
| | — |
| | 57 |
| | 62 |
|
Total oil and gas | | 9,074 |
| | 11,533 |
| | 12,187 |
| | 10,186 |
| | 11,261 |
|
Search and rescue | | 355 |
| | 348 |
| | 258 |
| | 382 |
| | 305 |
|
Air medical services | | 831 |
| | 1,239 |
| | 1,100 |
| | 951 |
| | 1,059 |
|
Flightseeing | | — |
| | 1,505 |
| | 1,080 |
| | — |
| | — |
|
| | 10,260 |
| | 14,625 |
| | 14,625 |
| | 11,519 |
| | 12,625 |
|
____________________
| |
(1) | Primarily oil and gas services, but also includes revenues from activities such as firefighting and utility support. |
| |
(2) | Does not include hours flown by helicopters in our dry-leasing line of service. |
ERA GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
| | | | | | | | | | | | | | | | | | | | |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 |
ASSETS | | | | (unaudited) | | (unaudited) | | (unaudited) | | |
Current assets: | | | | | | | | | | |
Cash and cash equivalents | | $ | 40,867 |
| | $ | 40,357 |
| | $ | 14,940 |
| | $ | 22,290 |
| | $ | 31,335 |
|
Receivables: | | | | | | | | | | |
Trade, net of allowance for doubtful accounts | | 33,390 |
| | 48,307 |
| | 52,582 |
| | 47,780 |
| | 38,137 |
|
Other | | 2,062 |
| | 1,679 |
| | 2,078 |
| | 4,824 |
| | 4,374 |
|
Inventories, net | | 26,869 |
| | 27,039 |
| | 26,863 |
| | 26,780 |
| | 26,853 |
|
Prepaid expenses and other | | 2,661 |
| | 1,712 |
| | 2,991 |
| | 3,292 |
| | 2,167 |
|
Deferred income taxes | | 1,996 |
| | 2,065 |
| | 1,991 |
| | 2,138 |
| | 2,347 |
|
Escrow deposits | | — |
| | — |
| | — |
| | 3,048 |
| | — |
|
Total current assets | | 107,845 |
| | 121,159 |
| | 101,445 |
| | 110,152 |
| | 105,213 |
|
Property and equipment | | 1,171,267 |
| | 1,128,510 |
| | 1,116,678 |
| | 1,084,199 |
| | 1,066,958 |
|
Accumulated depreciation | | (308,141 | ) | | (296,294 | ) | | (284,547 | ) | | (273,754 | ) | | (263,306 | ) |
Net property and equipment | | 863,126 |
| | 832,216 |
| | 832,131 |
| | 810,445 |
| | 803,652 |
|
Equity investments and advances | | 31,753 |
| | 31,641 |
| | 36,053 |
| | 35,433 |
| | 34,986 |
|
Goodwill | | 352 |
| | 352 |
| | 352 |
| | 352 |
| | 352 |
|
Other assets | | 14,098 |
| | 14,794 |
| | 15,868 |
| | 16,074 |
| | 14,380 |
|
Total assets | | $ | 1,017,174 |
| | $ | 1,000,162 |
| | $ | 985,849 |
| | $ | 972,456 |
| | $ | 958,583 |
|
| | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | |
Current liabilities: | | | | | | | | | | |
Accounts payable and accrued expenses | | $ | 15,120 |
| | $ | 21,819 |
| | $ | 23,129 |
| | $ | 13,639 |
| | $ | 13,293 |
|
Accrued wages and benefits | | 7,521 |
| | 9,651 |
| | 9,791 |
| | 9,583 |
| | 8,792 |
|
Accrued interest | | 949 |
| | 4,805 |
| | 950 |
| | 4,624 |
| | 772 |
|
Accrued income taxes | | 267 |
| | 1,029 |
| | 236 |
| | 781 |
| | 613 |
|
Derivative instruments | | 1,109 |
| | 1,991 |
| | 569 |
| | 529 |
| | 621 |
|
Current portion of long-term debt | | 27,426 |
| | 2,787 |
| | 2,787 |
| | 2,787 |
| | 2,787 |
|
Other current liabilities | | 3,162 |
| | 4,154 |
| | 4,258 |
| | 4,171 |
| | 3,267 |
|
Total current liabilities | | 55,554 |
| | 46,236 |
| | 41,720 |
| | 36,114 |
| | 30,145 |
|
Long-term debt | | 282,118 |
| | 277,390 |
| | 278,023 |
| | 278,755 |
| | 279,391 |
|
Deferred income taxes | | 217,027 |
| | 216,985 |
| | 214,117 |
| | 211,479 |
| | 209,574 |
|
Deferred gains and other liabilities | | 2,111 |
| | 2,898 |
| | 3,120 |
| | 3,476 |
| | 3,412 |
|
Total liabilities | | 556,810 |
| | 543,509 |
| | 536,980 |
| | 529,824 |
| | 522,522 |
|
Equity: | | | | | | | | | | |
Era Group Inc. stockholders’ equity: | | | | | | | | | | |
Common stock | | 204 |
| | 204 |
| | 204 |
| | 203 |
| | 202 |
|
Additional paid-in capital | | 429,109 |
| | 428,530 |
| | 425,010 |
| | 423,728 |
| | 421,310 |
|
Retained earnings | | 31,797 |
| | 28,612 |
| | 24,346 |
| | 19,125 |
| | 14,680 |
|
Treasury shares, at cost | | (551 | ) | | (547 | ) | | (547 | ) | | (334 | ) | | (113 | ) |
Accumulated other comprehensive income (loss), net of tax | | 95 |
| | 99 |
| | 146 |
| | 175 |
| | 176 |
|
Total Era Group Inc. stockholders’ equity | | 460,654 |
| | 456,898 |
| | 449,159 |
| | 442,897 |
| | 436,255 |
|
Non-controlling interest in subsidiary | | (290 | ) | | (245 | ) | | (290 | ) | | (265 | ) | | (194 | ) |
Total equity | | 460,364 |
| | 456,653 |
| | 448,869 |
| | 442,632 |
| | 436,061 |
|
Total liabilities and stockholders’ equity | | $ | 1,017,174 |
| | $ | 1,000,162 |
| | $ | 985,849 |
| | $ | 972,456 |
| | $ | 958,583 |
|
The Company’s management uses EBITDA and Adjusted EBITDA to assess the performance and operating results of our business. EBITDA is defined as Earnings before Interest (includes interest income and interest expense), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for certain non-recurring items that occur during the reported period, as noted below. We include EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance. Neither EBITDA nor Adjusted EBITDA is a recognized term under generally accepted accounting principles in the U.S. (“GAAP”). Accordingly, they should not be used as an indicator of, or an alternative to, net income as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements, such as debt service requirements. Because the definitions of EBITDA and Adjusted EBITDA (or similar measures) may vary among companies and industries, they may not be comparable to other similarly titled measures used by other companies.
The following table provides a reconciliation of Net Income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA further adjusted to exclude gains on dispositions (in thousands).
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 | | Dec 31,
2014 | | Dec 31,
2013 |
Net Income | | $ | 3,140 |
| | $ | 4,311 |
| | $ | 5,196 |
| | $ | 4,374 |
| | $ | 1,677 |
| | $ | 17,021 |
| | $ | 18,304 |
|
Depreciation | | 11,854 |
| | 11,746 |
| | 11,425 |
| | 11,287 |
| | 11,129 |
| | 46,312 |
| | 45,561 |
|
Interest income | | (122 | ) | | (130 | ) | | (143 | ) | | (145 | ) | | (139 | ) | | (540 | ) | | (591 | ) |
Interest expense | | 3,556 |
| | 3,629 |
| | 3,840 |
| | 3,753 |
| | 4,311 |
| | 14,778 |
| | 18,050 |
|
Income tax expense | | 155 |
| | 2,868 |
| | 2,759 |
| | 2,503 |
| | 3,036 |
| | 8,285 |
| | 11,727 |
|
EBITDA | | $ | 18,583 |
| | $ | 22,424 |
| | $ | 23,077 |
| | $ | 21,772 |
| | $ | 20,014 |
| | $ | 85,856 |
| | $ | 93,051 |
|
Special items (1) | | — |
| | 2,462 |
| | 2,457 |
| | — |
| | — |
| | 4,919 |
| | 2,213 |
|
Adjusted EBITDA | | $ | 18,583 |
| | $ | 24,886 |
| | $ | 25,534 |
| | $ | 21,772 |
| | $ | 20,014 |
| | $ | 90,775 |
| | $ | 95,264 |
|
Gains on asset dispositions, net (“Gains”) | | (29 | ) | | (42 | ) | | (3,139 | ) | | (2,891 | ) | | (464 | ) | | (6,101 | ) | | (18,301 | ) |
Adjusted EBITDA excluding Gains | | $ | 18,554 |
| | $ | 24,844 |
| | $ | 22,395 |
| | $ | 18,881 |
| | $ | 19,550 |
| | $ | 84,674 |
| | $ | 76,963 |
|
____________________
| |
(1) | Special items include the following: |
| |
• | In the three months ended September 30, 2014, a pre-tax charge of $2.5 million related to the accelerated recognition of previously awarded but deferred compensation awards following the resignation of our former CEO; |
| |
• | In the three months ended June 30, 2014, a pre-tax impairment charge of $2.5 million on a note receivable from a foreign company with whom we participated in bids for contracts; and |
| |
• | In the year ended December 31, 2013, a one-time charge of $2.0 million related to the early termination of operating leases on certain helicopters configured for air medical services and SEACOR management fees of $0.2 million incurred prior to the Spin-off on January 31, 2013. |
ERA GROUP INC. FLEET COUNTS (1) (unaudited) |
| | | | | | | | | | | | | | | |
| | Dec 31,
2014 | | Sep 30,
2014 | | Jun 30,
2014 | | Mar 31,
2014 | | Dec 31,
2013 |
Heavy: | | | | | | | | | | |
EC225 | | 9 |
| | 9 |
| | 9 |
| | 9 |
| | 9 |
|
| | | | | | | | | | |
Medium: | | | | | | | | | | |
AW139 | | 39 |
| | 39 |
| | 38 |
| | 37 |
| | 35 |
|
B212 | | 9 |
| | 9 |
| | 9 |
| | 10 |
| | 11 |
|
B412 | | 6 |
| | 6 |
| | 6 |
| | 6 |
| | 6 |
|
S76 A/A++ | | 2 |
| | 2 |
| | 2 |
| | 2 |
| | 3 |
|
S76 C+/C++ | | 6 |
| | 6 |
| | 6 |
| | 6 |
| | 6 |
|
| | 62 |
| | 62 |
| | 61 |
| | 61 |
| | 61 |
|
| | | | | | | | | | |
Light—twin engine: | | | | | | | | | | |
A109 | | 9 |
| | 9 |
| | 9 |
| | 9 |
| | 9 |
|
BK-117 | | 3 |
| | 3 |
| | 3 |
| | 3 |
| | 3 |
|
EC135 | | 20 |
| | 20 |
| | 20 |
| | 20 |
| | 20 |
|
EC145 | | 5 |
| | 5 |
| | 5 |
| | 4 |
| | 4 |
|
| | 37 |
| | 37 |
| | 37 |
| | 36 |
| | 36 |
|
| | | | | | | | | | |
Light—single engine: | | | | | | | | | | |
A119 | | 17 |
| | 17 |
| | 24 |
| | 24 |
| | 24 |
|
AS350 | | 35 |
| | 35 |
| | 35 |
| | 35 |
| | 35 |
|
| | 52 |
| | 52 |
| | 59 |
| | 59 |
| | 59 |
|
Total Helicopters | | 160 |
| | 160 |
| | 166 |
| | 165 |
| | 165 |
|
____________________
| |
(1) | Includes all owned, joint ventured, leased-in and managed helicopters and excludes helicopters fully paid for and delivered but not yet placed in service as of the applicable dates. |
