14-Mar-2014 Source: Erickson
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 fourth quarter and full year 2013 financial results and initiated guidance for fiscal 2014.
Udo Rieder, Chief Executive Officer of Erickson, commented, “We finished the year with a strong fourth quarter and have made great progress along a number of dimensions. We have substantially completed the integration of our two acquisitions and greatly improved our operational performance for our government customers. We expect to leverage the strength of our comprehensive aviation services platform in 2014 to secure business with new customers and to offset significant, but anticipated declines in defense spending in Afghanistan.”
Mr. Rieder continued, “As we look forward, we believe we have a clear opportunity to further enhance our competitive position across key end markets. The recently announced Hunt Oil contract is an excellent example of leveraging our diversified fleet to more effectively serve the needs of our customers. Even as we broaden our services, we expect to streamline and better integrate our operations. We believe this will enable us to execute better, drive improved profitability and establish a firm foundation for long-term growth.”
Fourth Quarter and Recent Highlights
Full Year Highlights
Fourth Quarter Results
Revenue for the quarter ended December 31, 2013 increased 137% compared with the prior year’s fourth quarter, to $92.5 million.
Government segment revenues increased 280% to $67.2 million during the fourth quarter of 2013 as compared to revenues of $17.7 million in the prior year period, reflecting an increase in defense and security of $47.7 million, related to the acquisition of Evergreen and an increase in firefighting of $3.4 million related to increased demand in Australia and Turkey, partially offset by a decrease in crewing revenues in Italy.
Commercial segment revenues in the fourth quarter increased 18% to $25.3 million as compared to $21.4 million in the prior year. The increase was primarily due to new business in the South American oil and gas market and U.S. spot construction, partially offset by decreases in MRO.
Fourth quarter 2013 operating income was $9.2 million, a nearly five-fold increase compared to $1.5 million in the prior year; pro forma operating income increased by 22.7% compared to the prior year’s level of $8.8 million. Adjusted operating income, which excludes $1.6 million in acquisition, integration and related expenses, increased to $10.8 million, as presented in the table below.
Other expense in the fourth quarter of 2013 was $11.9 million as compared to $2.4 million of expense in the prior year fourth 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 our acquisitions. In the fourth quarter of 2013, other expense also included a charge of $3.4 million related to the loss on sale of the EIA note, which was partially offset by a reduction in interest and penalties on tax exposure items of $1.0 million. During the fourth quarter of 2013 we reversed our previous estimates for penalties and interest on tax exposure items related to our tax positions in the Philippines and Peru. We received the EIA note as part of the May 2, 2013 acquisition of the Evergreen Helicopters, Inc. from Evergreen International Aviation, Inc.
Our net loss in the fourth quarter of 2013 was $1.7 million, or $0.12 per diluted share, as compared to a net loss of $0.9 million, or $0.10 per diluted share in the prior year fourth quarter. After adjustments for both acquisition and integration related items as well as the loss on the sale of the EHI note, adjusted net income was $1.3 million, or $0.10 per diluted share, for the quarter ended December 31, 2013, as presented in the table below.
Fourth quarter Adjusted EBITDA, as presented in the table below, increased 177% to $19.0 million in the fourth quarter of 2013 as compared to $6.9 million in the prior year period.
Adjusted EBITDAR was $24.4 million in the fourth quarter of 2013 as compared to $6.9 million in the prior year’s fourth quarter.
As of December 31, 2013, the Company had $68.1 million drawn on its revolving credit facility (excluding letters of credit) and increased its maximum borrowing availability from $125.0 million to $140.0 million. As of December 31, 2013, the Company had $1.9 million in cash on its balance sheet.
Initiation of 2014 Guidance
The full year guidance provided below is operational and adjusted to exclude any acquisition or integration related expenses.
For the full year ended December 31, 2014, the Company anticipates revenues in the range of $385 to $405 million, adjusted EBITDA in the range of $100 to $110 million, adjusted EBITDAR in the range of $120 to $130 million, and earnings per share of $0.95 to $1.35, based on fully diluted shares outstanding of 13.8 million.
Mr. Rieder concluded, “We are pleased to be positioned to fully offset the expected decline in our defense business with growth in a number of commercial programs, especially through strong increases into the fast-growing oil and gas market in South America. We are pleased to leverage our comprehensive platform of heavy, medium and light aircraft to effectively capture larger, more comprehensive support contracts. We have an opportunity for strong, diversified global growth and believe we can drive significant value for our customers, partners, and shareholders.”
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, fire-fighting, 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 http://www.ericksonaviation.com.
The Company will hold a conference call to discuss its earnings results for the fourth quarter ended December 31, 2013 on March 13, 2014 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 investors.ericksonaircrane.com. To access the call, dial toll-free 1-888-428-9480 or 1-719-457-2083 (international). The pass code is 8121387.
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 8121387. The replay will be available beginning at 7:30 p.m. ET on Thursday, March 13, 2014, and will last through 11:59 p.m. ET March 27, 2014.
This conference call will also be broadcast live over the Internet and can be accessed by all interested parties by clicking onhttp://investors.ericksonaircrane.com/. 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.
Financial Statements are to be found in the full press release