Erickson Air-Crane announces FY2013 Q3 Results to 30th September 2013

Erickson Air-Crane announces FY2013 Q3 Results to 30th September 2013 8 Nov, 13, Source: Erickson Air-Crane

Erickson Air-Crane Incorporated(NASDAQ:EAC) (“Erickson,” the “Company,” “we,” “us” and “our”), a leading global provider of aviation services to a worldwide mix of commercial and government customers and the vertically integrated manufacturer and operator of the powerful, heavy-lift helicopter, the Erickson S-64 Aircrane, today announced third quarter 2013 financial results.

Third Quarter and Recent Highlights

  • Revenue increased 58% to $120.2 million, primarily due to contributions from acquisitions; this growth was partially offset by a decrease in cost per hour and crewing services in Italy, coupled with lower firefighting revenues compared to an extraordinary season in the prior year.
  • Adjusted EBITDA, which excludes acquisition and integration related expenses, increased 24% to $47.7 million.
  • On September 3rd, the Company closed its strategic acquisition of Air Amazonia, establishing an expanded aerial services presence in South America targeting the oil and gas market.
  • Key contracts signed include;
  • Australia NAFC – firefighting
  • Los Angeles County – firefighting
  • SOCAFRICA Department of Defense – logistics support
  • Sikorsky Aircraft Corp – aircraft assemblies
  • Solidified executive leadership team with appointments of Chief Financial Officer, Vice President of Global Sales and Marketing, Vice President of Safety, Security and Compliance, and Vice President of Global Human Resources.

Third Quarter Results

Revenue for the quarter ended September 30, 2013 increased 58% compared with the prior year third quarter, to $120.2 million. Revenue growth was primarily due to the acquisition of Evergreen Helicopters. Erickson’s legacy business excluding Evergreen Helicopters’ and Air Amazonia’s contributions, was down for the quarter, primarily due to a decrease in cost per hour and crewing services in Italy, coupled with lower firefighting revenues as compared to a highly active fire season in the prior year third quarter.

Government segment revenues increased 61% during the third quarter of 2013, to $92.9 million as compared to $57.6 million in the prior year third quarter, due to the Evergreen Helicopters acquisition.

Commercial segment revenues increased 47% to $27.3 million as compared to $18.6 million in the prior year third quarter due to higher revenue in the manufacturing / MRO business as well as an increase in infrastructure construction in North and South America, which includes the Air Amazonia acquisition.

Third quarter 2013 operating income was $33.3 million as compared to $30.5 million in the prior year third quarter. This includes $2.5 million of acquisition, integration and related expenses that decreased operating income. Excluding these expenses, adjusted operating income increased 17.4% to $35.8 million, as presented in the table below.

Other expense in the third quarter of 2013 was $9.6 million as compared to $1.9 million of expense in the prior year third quarter. The primary driver was an increase in net interest expense to $8.7 million as compared to $1.5 million in the prior year due to increased average outstanding borrowings related to the EHI acquisition.

Net income in the third quarter of 2013 was $14.5 million, or earnings of $1.05 per diluted share, as compared to net income of $17.6 million, or earnings of $1.80 per diluted share in the prior year third quarter. Net income and earnings per diluted share, adjusted to exclude acquisition, integration and related expenses, were $16.0 million, or $1.16 per diluted share, for the quarter ended September 30, 2013, as presented in the table below.

Adjusted EBITDA, as presented in the table below, increased 24% to $47.7 million in the third quarter of 2013 as compared to $38.4 million in the prior year period.

Adjusted EBITDAR, which also excludes the effect of the acquisition, integration, and related expenses as presented in the table below, was $53.1 million in the third quarter of 2013 as compared to $38.4 million in the prior year third quarter.

Udo Rieder, Chief Executive Officer of Erickson, commented, “We made progress on our strategic and operational objectives in the quarter. This included the closing of the Air Amazonia acquisition, which provides us a broader aerial services infrastructure in Brazil. We also were pleased to make several strong additions to our leadership team and to complete a number of important contract wins that further diversify our mix of business.”

Mr. Rieder continued, “Our softer than expected financial performance reflects a lighter North American firefighting season, a timing shift of contract activity in our South American oil and gas business and penalties for the Evergreen Helicopters fleet. We have seen a significant reduction for October and minimizing future penalties remains a high priority.”

As of September 30, 2013, the Company had $54.5 million drawn on its revolving credit facility (excluding letters of credit) and a maximum borrowing availability of $65.8 million. As of September 30, 2013, the Company had $5.3 million in cash on its balance sheet.

Updated Guidance

The full year guidance provided below is operational and adjusted to exclude any acquisition or integration related expenses (including $8.8 million incurred in the first three quarters).

The Company has revised its pro forma guidance, which assumes that the acquisitions of Evergreen Helicopters and Air Amazonia and associated financing had occurred on January 1, 2013. The new pro forma guidance incorporates the lower than expected third quarter results, and the Company’s current outlook for the fourth quarter. The update reflects the Air Amazonia pro forma 2013 contribution of $25.0 million in revenue, $6.0 million in EBITDA and $0.17 in earnings per share.

The Company now expects pro forma results for full year as follows: revenues in the range of $385 to $395 million, Adjusted EBITDA in the range of $104 to $110 million, and earnings per share of $1.00 to $1.25, based on fully diluted shares outstanding of 13.8 million, which includes the dilutive effect of the conversion of approximately 4.0 million outstanding shares of preferred stock into the same number of shares of common stock as if it had occurred on January 1, 2013.

The Company now expects “as reported” results for full year as follows: revenues in the range of$310 to $320 million, Adjusted EBITDA in the range of $89 to $95 million and adjusted earnings per share in the range of $1.20 to $1.50, based on the assumed diluted weighted average shares outstanding of 11.8 million. The Company has updated its full year weighted average share count to reflect the total it expects to report for the full year.

Mr. Rieder concluded, “We are focused on utilizing our global platform and dedicated employee base to build one of the world’s leading aviation services companies. We look forward to demonstrating further progress and to creating enduring value as we achieve our vision for the business.”

About Erickson Air-Crane Incorporated

Erickson Air-Crane Incorporated is a leading global provider of aviation services to a worldwide mix of commercial and government customers. The Company currently operates a diverse fleet of 90 rotary-wing and fixed wing aircraft, including a fleet of 20 heavy-lift S-64 Aircranes. This fleet supports a wide variety of government and commercial customers, across a broad range of aerial services, including critical supply and logistics for deployed military forces, humanitarian relief, firefighting, timber harvesting, infrastructure construction, and transportation and other government related activities. The Company also maintains a vertical manufacturing capability for the S-64 Aircrane, related components, and other aftermarket support and maintenance, repair, and overhaul services for the Aircrane and other aircraft. Founded in 1971, Erickson Air-Crane is headquartered in Portland, Oregon and maintains facilities and operations in North America, South America, the Middle East,Africa and Asia-Pacific. For more information, please visit

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. You can identify forward-looking statements by words such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other comparable terminology. These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include: that we do not realize the benefits from the recently completed the acquisitions of both Evergreen Helicopters and Air Amazonia and we may not realize the benefits of these acquisitions on a timely basis or at all; our ability to integrate these businesses successfully or in a timely and cost-efficient manner; our ability to successfully expand these businesses, enter new markets and manage international expansion; that we do not have extensive operating history in the aerial services segments, in the geographic areas, or with the types of aircraft historically operated by Evergreen Helicopters and Air Amazonia; that the anticipated reduction in troops in Afghanistan in the near-term may adversely affect us; that we operate in certain dangerous and war-affected areas, which may result in hazards to our fleet and personnel; the hazards associated with our helicopter operations, which involve significant risks and which may result in hazards that may not be covered by our insurance or may increase the cost of our insurance; our safety record; our substantial indebtedness; that we and our subsidiaries may still incur significant additional indebtedness; our failure to obtain any required financing on favorable terms; compliance with debt obligations, which could adversely affect our financial condition and impair our ability to grow and operate our business; cancellations, reductions or delays in customer orders; our ability to collect on customer receivables; weather and seasonal fluctuations that impact aerial services activities; competition; reliance on a small number of large customers; the impact of short-term contracts; the availability and size of our fleet; the impact of government spending; the impact of product liability and product warranties; the ability to attract and retain qualified personnel; the impact of environmental and other regulations, including FAA regulations and similar international regulations; our ability to accurately forecast financial guidance; our ability to convert backlog into revenues and appropriately plan expenses; worldwide economic conditions (including conditions in Greece, Italy and the other geographic areas in which we operate); our reliance on a small number of manufacturers; the necessity to provide components or services to owners and operators of aircraft; our ability to effectively manage our growth; our ability to keep pace with changes in technology; our ability to adequately protect our intellectual property; our ability to successfully enter new markets and manage international expansion; our ability to expand and market manufacturing and maintenance, repair and overhaul services; the potential unionization of our employees; the fluctuation in the price of fuel; the impact of changes in the value of foreign currencies; and the risks of doing business in developing countries and politically or economically volatile areas; as well as other risks and uncertainties more fully described under the heading “Risk Factors” in our most recently filed Annual Report on Form 10-K, or Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, as well as the other reports we file with the SEC from time to time.

You should not place undue reliance on any forward-looking statements. Erickson Air-Craneassumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable laws.

Conference Call

The Company will hold a conference call to discuss its earnings results for the third quarter endedSeptember 30, 2013 on November 7, 2013 at 4:30 p.m. Eastern Time with prepared remarks by Udo Rieder, the Company’s President and Chief Executive Officer, and Eric Struik, the Company’s Chief Financial Officer, to be followed by a question and answer session for the investment community. A live webcast of the call can be accessed at To access the call, dial toll-free 1-888-329-8877 or 1-719-325-2464 (international). The pass code is 5190563.

To listen to a telephonic replay of the conference call, dial toll-free 1-877-870-5176 or 1-858-384-5517 (international) and enter pass code 5190563. The replay will be available beginning at 7:30 p.m. ET on Thursday, November 7, 2013, and will last through 11:59 p.m. Eastern Time November 21, 2013.

This conference call will also be broadcast live over the Internet and can be accessed by all interested parties by clicking on Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call by accessing the same link.

Full financial statements etc can be found here

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