Erickson reports FY2014 Q1 results to 31 March 2014

Erickson reports FY2014 Q1 results to 31 March 2014 11 May, 14, Source: Erickson

Erickson 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 first quarter 2014 financial results and reiterated its full-year guidance for fiscal 2014.

Udo Rieder, Chief Executive Officer of Erickson, commented, “We continued to execute well for our customers during the first quarter and are well positioned for sustained growth during the remainder of the year. Our first quarter revenues doubled versus last year, driven by our successful strategic acquisitions but offset by a challenging year–over-year comparison for revenue and profitability from our Aircrane operations. We expect this to be temporary. Our backlog was strengthened through the addition of new commercial and defense contracts and gives us increasing confidence in our full year expectations.”

Mr. Rieder continued, “The customer response, across a range of end markets, to our diversified and expanded fleet and set of mission capabilities is extremely encouraging. In particular, we have made rapid progress in the South American oil and gas market and we expect this to be a significant source of long-term growth. Additionally, we are pleased to see increasing demand in a variety of end use markets as well as significant interest in our MRO capabilities.”

First Quarter and Recent Highlights

  • First quarter revenue increased 101% to $74.2 million versus the prior year period, driven by contributions from acquisitions, partially offset by lower revenue contribution from the Company’s fleet of Aircranes, in infrastructure construction, firefighting and timber harvesting due to both weather and the timing of new contract starts. On a pro forma basis, revenues declined 9.2% as compared to $81.7 million in the prior year’s first quarter; this reflecting a significant decline in revenue derived from the Aircrane fleet.
  • First quarter EBITDA grew 9.2% to $5.2 million, reflecting a decrease in the spending for acquisition, integration and other costs associated with the acquisitions, partially offset by increases in fixed costs associated with later than expected new contract starts and weather delays. These factors are also reflected in adjusted EBITDA, which excludes the effect of integration and acquisition related and other expenses, which declined by 17.2% to $5.8 million as compared to $7.0 million in the first quarter of last year. Pro forma adjusted EBITDA in the prior year quarter was $17.2 million and declined due to the same factors.
  • Erickson secured new multi-year contracts with Hunt Oil and Pluspetrol during the first quarter. These and other new contracts, contract renewals and committed work under multi-year contracts are reflected in the Company’s reported March 31, 2014 backlog of $494.0 million. The Company is pleased with this backlog and the visibility it provides for the remainder the year.

First Quarter Results

Revenue for the quarter ended March 31, 2014, the Company’s seasonally lightest reporting period, increased 101% compared with the prior year period, to $74.2 million, driven by strategic acquisitions and partially offset by lower revenues for infrastructure construction and firefighting. Pro forma revenues declined 9.2% versus prior year, reflecting an expected reduction of defense-related revenues with the decline in overseas operational tempo.

Government segment revenues increased 218% to $55.9 million during the first quarter of 2014 as compared to revenues of $17.6 million in the prior year period, driven primarily by contributions from acquisitions, offset by lower firefighting revenues in Australia. On a pro forma basis, Government segment revenues decreased, as expected, by 4.3% compared to the prior year level of $58.4 million.

Commercial segment revenues in the first quarter decreased by 5.5% to $18.3 million as compared to $19.3 million in the prior year’s period. The slight year-over-year decrease was primarily due to lower timber harvesting revenues primarily in Malaysia coupled with lower North American infrastructure construction primarily due to weather, partially offset by increases in South American infrastructure construction and higher revenues in MRO as compared to the prior year period.

The Company reported a first quarter 2014 operating loss of $2.8 million as compared to the prior year loss of $0.3 million; the Company’s adjusted operating loss, which excludes acquisition, integration and related expenses, was $2.0 million, as compared to adjusted operating income of $1.9 million in the prior year period. On a pro forma basis, the Company’s first quarter adjusted operating loss was $2.0 million as compared to operating income of $6.9 million in the prior year.

Other expense in the first quarter of 2014 was $9.3 million as compared to $1.8 million of expense in the prior year first quarter. The primary driver was an increase in net interest expense related to the financing of the Company’s acquisitions since the prior year period.

The Company’s reported net loss in the first quarter of 2014 was $7.6 million, or $0.55 per diluted share, as compared to a net loss of $1.2 million, or $0.13 per diluted share in the prior year first quarter. The Company’s adjusted net loss in the first quarter of 2014 was $7.1 million, or $0.52 per diluted share, as presented in the table below.

First quarter adjusted EBITDA, as presented in the table below, decreased 17.2% to $5.8 million as compared to $7.0 million in the prior year period; prior year first quarter pro forma adjusted EBITDA was $17.2 million.

Adjusted EBITDAR was $10.7 million in the first quarter of 2014 as compared to $7.0 million in the prior year’s first quarter; prior year pro forma first quarter adjusted EBITDAR was $25.4 million.

As of March 31, 2014, the Company had $83.6 million drawn on its revolving credit facility (excluding letters of credit) and $3.2 million in cash on its balance sheet.

Reiteration of 2014 Guidance

The full year guidance described below is operational and adjusted to exclude any acquisition or integration related expenses, including those incurred in the first quarter.

For the full year ended December 31, 2014, the Company continues to anticipate 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, “Our customers continue to respond favorably to our ability to offer a comprehensive platform of heavy, medium and light lift aircraft. We are continuing to expand our business in South America and look forward to being able to announce other new contracts in the months to come as we continue to shift business out of softening markets to take advantage of growth opportunities in others. Our expanding global presence drives diversification in customers, end markets and will ultimately drive value for our customers, partners, and shareholders.”

About Erickson Incorporated

Erickson 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 91 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 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.

Full financial statements can be found here

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