10-Nov-2014 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 third quarter and year to date 2014 financial results.
Udo Rieder, Chief Executive Officer of Erickson, commented, “We delivered solid performance during our peak season, despite softness in fire activity across the globe. Recent contract wins and proposal activity in both Oil and Gas and in our Government segment give us confidence in our long-term strategy. We remain focused on diversification to achieve a more balanced mix of end markets while positioning our business for sustainable growth. We continue to see an excellent opportunity to increase utilization of our fleet around the world.”
Recent Highlights and Third Quarter
Third Quarter Results
Revenue for the quarter ended September 30, 2014 was essentially flat compared to prior year, with growth in the Company’s South American oil and gas business and firefighting offset by lower revenues from defense and security related services.
Government segment revenues in the third quarter decreased 8.1% to $85.4 million as compared to revenues of $92.9 million in the prior year period, driven primarily by the de-scoping of Department of Defense activity in Afghanistan, lower than expected flight hours in firefighting in Greece and the US, partially offset by increased firefighting revenues in Turkey.
Commercial segment revenues in the third quarter increased by 20.7% to $33.0 million as compared to $27.3 million in the prior year’s period. The year-over-year increase was primarily due to higher oil and gas revenue in South America and revenues associated with aircraft sales by our Trade group; this was offset primarily by a reduction in MRO revenues in the prior year, which benefited from a large one time sale of intellectual property.
Third quarter 2014 operating income increased by 15.8% to $38.5 million as compared to the prior year level of $33.3 million; adjusted operating income, which excludes acquisition, integration and restructuring expenses, increased by 10.2% to $39.4 million, as compared to adjusted operating income of $35.8 million in the prior year period.
Net income in the third quarter of 2014 increased by 16.1% to $16.9 million, or $1.22 per diluted share, compared to $14.5 million, or $1.05 per diluted share, in the prior year period; adjusted net income increased by 8.6% to $17.4 million, or $1.26 per diluted share as compared to $16.0 million or $1.16 per diluted share in the prior year.
Third quarter adjusted EBITDA increased to $50.0 million as compared to $47.7 million in the prior year period; prior year third quarter pro forma adjusted EBITDA was $48.4 million. Adjusted EBITDAR was $55.1 million in the third quarter of 2014 as compared to $53.1 million in the prior year’s third quarter.
As of September 30, 2014, the Company had $86.2 million drawn on its revolving credit facility (excluding letters of credit) and $2.6 million in cash on its balance sheet.
2014 Guidance
The full year guidance described below is operational and adjusted to exclude any acquisition or integration related expenses, including those incurred for the year to date ended September 30, 2014.
For the full year ended December 31, 2014, the Company now anticipates completing the year towards the lower end of its previously issued guidance range inclusive of revenues in the range of $350 to $370 million; EBITDA in the range of $85 to $95 million; adjusted EBITDAR in the range of $106 to $116 million, and adjusted earnings per share of $0.35 to $0.75, based on fully diluted shares outstanding of 13.8 million.
Mr. Rieder concluded, “We are well underway in growing our oil and gas business in South America and are encouraged by increased activity in our Government segment. We continue to be a market leader in firefighting, timber harvesting and construction. As we look towards the next year, we expect to achieve a better balance by end market and geography, in particular through continued growth in our commercial business.We are pleased to have captured yet another important and multi-year contract with a major oil and gas company in South America. We intend to continue to drive the business forward and to retain our cost discipline. We expect to begin fiscal 2015 with a more nimble and flexible operating footprint and an improved ability to react to market conditions and opportunities across the business.”
