Erickson Reports Second Quarter 2015 Results

Erickson Reports Second Quarter 2015 Results

10-Aug-2015 Source: Erickson

Erickson Incorporated (NASDAQ:EAC) (“Erickson,” the “Company,” “we,” “us” and “our”), a leading provider of aviation services and products to a worldwide mix of commercial and government customers, today announced second quarter 2015 financial results.

Jeff Roberts, Chief Executive Officer of Erickson, commented, “Our second quarter results were below expectations as a result of challenges in the oil and gas market, our government business, and a slower than expected start to the firefighting season. Aggressive management of operating expenses, working capital, and capital expenditures partially offset these headwinds. We are re-investing some of these savings into the front end of our business and implementing transformative changes to our operating model. This new operating model will enhance our competitive position, generate sustainable free cash flow, and drive value for our stakeholders.”

Recent Developments

  • In June 2015, we were awarded a contract to support Repsol’s oil and gas operations to provide crew and cargo transport on the North Slope of Alaska.
  • In June 2015, we were awarded a one-year contract renewal with the U.S. Department of Transportation to provide weekly, year-round helicopter service for people and cargo between Nome, Wales, and Little Diomede, Alaska.
  • In June 2015, we were awarded a contract with Chilcott, Inc. to provide training for Uruguayan Air Force helicopter pilots. Under the agreement, Erickson will train pilots for work on the United Nations Stabilization Mission in the Democratic Republic of the Congo.
  • In July 2015, we made the decision to consolidate our operations in the McMinnville facility to our other locations in Portland and Southern Oregon to improve efficiencies and reduce expenses.

Second Quarter Results

Revenue for the quarter ended June 30, 2015 was $69.3 million, a decline of $11.6 million compared to prior year. The Company benefited from year-over-year growth in its Manufacturing & MRO business and aircraft sales. These gains were outweighed by continued softness in Government Aviation and, to a lesser extent, a modest decline in Commercial Aviation.

  • Manufacturing & MRO revenues increased to $6.6 million as compared to $3.4 million in the prior year period, reflecting the increased aircraft sales, as well as part sales to support the global fleet of Bell 214 helicopters.
  • Government Aviation Services revenues decreased to $28.4 million as compared to revenues of $41.9 million in the prior year period, driven primarily by the continued reduction of operational tempo in Afghanistan and other U.S. Department of Defense activity.
  • Commercial Aviation Services revenues decreased to $34.3 million as compared to $35.6 million in the prior year period driven primarily by a less intense firefighting season, partially offset by new spot construction jobs in the second quarter.

Second quarter 2015 operating income was $0.2 million as compared to the prior year loss of $17.4 million; adjusted operating income, which excludes acquisition, integration and restructuring expenses, as well as non-cash asset impairment, was also $0.2 million, as compared to $4.6 million in the prior year period.

Second quarter Adjusted EBITDA was $10.3 million as compared to the prior year period Adjusted EBITDA of $13.8 million. Adjusted EBITDAR was $14.5 million in the second quarter of 2015 as compared to $19.0 million in the prior year’s second quarter.

During the second quarter of 2015, the Company reduced capital spending to $6.2 million as compared to $19.7 million in the prior year period. Operating Cash Flow improved $22.6 million, to a use of $3.8 million compared to a use of $26.5 million in the prior year’s second quarter.

As of June 30, 2015, the Company had $113.7 million drawn on its revolving credit facility (excluding the letters of credit) and $1.8 million in cash on its balance sheet.

About Erickson Incorporated

Erickson is a leading global provider of aviation services and operates, maintains and manufactures utility aircraft to safely transport people and cargo around the world. The Company is self-reliant, multifaceted and operates in remote locations under challenging conditions specializing in Government Services, Manufacturing and MRO, and Commercial Services (comprised of firefighting, HVAC, power line, construction, timber harvesting, oil and gas and specialty lift). With roots dating back to 1960, Erickson operates a fleet of approximately 80 aircraft, is headquartered in Portland, Oregon, USA, and operates in North America, South America, Europe, the Middle East, Africa, Asia Pacific, and Australia. For more information, please visit our new website at www.ericksonaviation.com.

Financial statements can be found here

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