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
- Fourth quarter revenue increased 137% to $92.5 million versus the prior year period, driven by contributions from acquisitions as well as organic growth in infrastructure construction and firefighting as compared to the prior year. Revenues grew 9% in the fourth quarter as compared to $85.2 million in the prior year’s fourth quarter on a pro forma basis including Evergreen Helicopters.
- Fourth quarter Adjusted EBITDA grew 177% to $19.0 million. Adjusted EBITDA excludes the effect of integration and acquisition related expenses as well as $3.4 million for a loss on sale of the Evergreen International Aviation note ("EIA note”) receivable. This represents a 14% increase in Adjusted EBITDA as compared to $16.6 million in the prior year’s fourth quarter pro forma Adjusted EBITDA.
- Erickson has secured a new four year contract with Hunt Oil in the South American oil and gas market.
- Earlier this week, Erickson secured an amendment to its revolving credit facility to increase the maximum availability from $125.0 million to $140.0 million.
Full Year Highlights
- Full-year revenue increased 76% to $318.2 million, driven primarily by acquisitions. Pro forma revenues for the full year increased by 4.2% to $395.2 million compared to $379.2 million in 2012.
- Full-year Adjusted EBITDA increased 60% to $90.9 million, a margin of 28.6%. Pro forma full-year Adjusted EBITDA decreased by 1% to $106.3 million as compared to 2012 adjusted EBITDA of $107.1 million, a margin of 26.8%, primarily due to the changes in mix of our business.
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.
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-Crane assumes 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 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 on http://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.
ERICKSON AIR-CRANE INCORPORATED AND SUBSIDIARIES | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,881 | $ | 1,468 | |||||
Restricted cash | 2,883 | 3,781 | |||||||
Accounts receivable net of allowances for doubtful accounts of $991 and $460 in 2013 and 2012, respectively | 65,987 | 24,446 | |||||||
Prepaid expenses and other current assets | 3,360 | 1,426 | |||||||
Income tax receivable | 135 | 1,048 | |||||||
Deferred tax assets | 3,715 | 8,208 | |||||||
Total current assets | 77,961 | 40,377 | |||||||
Aircraft support parts, net | 126,696 | 93,041 | |||||||
Aircraft, net | 127,179 | 66,673 | |||||||
Property, plant and equipment, net | 109,382 | 54,675 | |||||||
Other intangible assets, net | 22,908 | — | |||||||
Goodwill | 234,554 | — | |||||||
Other non-current assets | 28,625 | 2,057 | |||||||
Total assets | $ | 727,305 | $ | 256,823 | |||||
Liabilities and stockholders’ equity (deficit) | |||||||||
Current liabilities: | |||||||||
Accounts Payable | $ | 29,035 | $ | 8,746 | |||||
Current portion of long-term debt | — | 71,202 | |||||||
Accrued and other current liabilities | 41,233 | 19,662 | |||||||
Income tax payable | 621 | 6,275 | |||||||
Total current liabilities | 70,889 | 105,885 | |||||||
Long-term debt, less current portion | 16,160 | 26,674 | |||||||
Long-term revolving credit facilities | 68,086 | — | |||||||
Long-term notes payable | 355,000 | — | |||||||
Other long-term liabilities | 1,819 | 1,415 | |||||||
Uncertain tax positions | 5,669 | — | |||||||
Deferred tax liabilities | 16,775 | 17,481 | |||||||
Total liabilities | 534,398 | 151,455 | |||||||
Stockholders’ equity (deficit): | |||||||||
Common stock; $0.0001 par value; 110,000,000 shares authorized; 13,787,914 and 9,726,785 issued and outstanding at December 31, 2013 and December 31, 2012, respectively | 1 | 1 | |||||||
Additional paid-in capital | 179,954 | 101,833 | |||||||
Retained earnings (accumulated deficit) | 12,104 | 2,447 | |||||||
Accumulated other comprehensive income (loss) | (42 | ) | 71 | ||||||
Total stockholders’ equity (deficit) attributable to Erickson Air-Crane, Incorporated | 192,017 | 104,352 | |||||||
Noncontrolling interest | 890 | 1,016 | |||||||
Total stockholders’ equity (deficit) | 192,907 | 105,368 | |||||||
Total liabilities and stockholders’ equity | $ | 727,305 | $ | 256,823 | |||||
ERICKSON AIR-CRANE INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Net revenues: | $ | 92,465 | $ | 39,077 | $ | 318,221 | $ | 180,824 | ||||||||||||
Cost of revenues | 69,301 | 28,560 | 222,341 | 119,405 | ||||||||||||||||
Gross profit | 23,164 | 10,517 | 96,113 | 61,419 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
General and administrative | 10,880 | 5,827 | 37,366 | 17,232 | ||||||||||||||||
Research and development | 884 | 1,258 | 4,000 | 4,683 | ||||||||||||||||
Selling and marketing | 2,247 | 1,894 | 7,755 | 6,071 | ||||||||||||||||
Total operating expenses | 14,011 | 8,979 | 49,121 | 27,986 | ||||||||||||||||
Operating income (loss) | 9,153 | 1,538 | 46,992 | 33,433 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income (expense), net | (8,658 | ) | (1,453 | ) | (25,175 | ) | (6,990 | ) | ||||||||||||
Interest income (expense) related to tax contingencies | 858 | — | (13 | ) | — | |||||||||||||||
Amortization of debt issuance costs | (681 | ) | (322 | ) | (2,067 | ) | (1,174 | ) | ||||||||||||
Unrealized foreign exchange gain (loss) | 10 | (350 | ) | 309 | (322 | ) | ||||||||||||||
Loss on early extinguishment of debt | — | — | (215 | ) | — | |||||||||||||||
Realized foreign exchange gain (loss) | 46 | 581 | (172 | ) | 788 | |||||||||||||||
Gain (loss) on disposal of equipment | (40 | ) | (5 | ) | 1 | (5 | ) | |||||||||||||
Other income (expense), net | (3,407 | ) | (802 | ) | (3,674 | ) | 119 | |||||||||||||
Total other income (expense) | (11,872 | ) | (2,351 | ) | (31,006 | ) | (7,584 | ) | ||||||||||||
Net income (loss) before income taxes and noncontrolling interest | (2,719 | ) | (813 | ) | 15,986 | 25,849 | ||||||||||||||
Income tax expense (benefit) | (889 | ) | 45 | 6,120 | 10,213 | |||||||||||||||
Net income (loss) | (1,830 | ) | (858 | ) | 9,866 | 15,636 | ||||||||||||||
Less: Net income (loss) related to noncontrolling interest | 130 | (91 | ) | (209 | ) | (406 | ) | |||||||||||||
Net income (loss) attributable to Erickson Air-Crane, Incorporated | (1,700 | ) | (949 | ) | 9,657 | 15,230 | ||||||||||||||
Dividends on Redeemable Preferred Stock | — | — | — | 2,795 | ||||||||||||||||
Net income (loss) attributable to common stockholders | $ | (1,700 | ) | $ | (949 | ) | $ | 9,657 | $ | 12,435 | ||||||||||
Net income (loss) | (1,830 | ) | (858 | ) | $ | 9,866 | $ | 15,636 | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Foreign currency translation adjustment | (649 | ) | 19 | (107 | ) | 136 | ||||||||||||||
Comprehensive income (loss) | (2,479 | ) | (839 | ) | 9,759 | 15,772 | ||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interest | 160 | (124 | ) | (215 | ) | (435 | ) | |||||||||||||
Comprehensive income (loss) attributable to Erickson Air-Crane, Incorporated | $ | (2,319 | ) | $ | (963 | ) | $ | 9,544 | $ | 15,337 | ||||||||||
Net income (loss) per share attributable to common stockholders | ||||||||||||||||||||
Basic | $ | (0.12 | ) | $ | (0.10 | ) | $ | 0.86 | $ | 1.78 | ||||||||||
Diluted | $ | (0.12 | ) | $ | (0.10 | ) | $ | 0.82 | $ | 1.78 | ||||||||||
Weighted average shares outstanding | ||||||||||||||||||||
Basic | 13,786,308 | 9,749,860 | 11,221,005 | 6,981,027 | ||||||||||||||||
Diluted | 13,786,308 | 9,749,860 | 11,834,506 | 6,981,027 | ||||||||||||||||
ERICKSON AIR-CRANE INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | ||||||||||||||||||||
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | (1,830 | ) | $ | (858 | ) | $ | 9,866 | $ | 15,636 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization | 7,889 | 5,249 | 33,328 | 21,661 | ||||||||||||||||
Deferred income taxes | 549 | (6,108 | ) | 5,214 | 2,682 | |||||||||||||||
Non-cash interest expense on debt | 101 | 598 | 1,877 | 3,137 | ||||||||||||||||
Non-cash interest (income) expense on tax contingencies | (872 | ) | — | — | — | |||||||||||||||
Stock-based compensation | 127 | 389 | 792 | 2,118 | ||||||||||||||||
Write-off of debt issuance costs related to the early extinguishment of debt | — | — | 215 | — | ||||||||||||||||
Non-cash interest income on loans | (41 | ) | — | (140 | ) | — | ||||||||||||||
Amortization of debt issuance costs | 681 | 322 | 2,067 | 1,174 | ||||||||||||||||
Loss (gain) on sale of equipment | 40 | 5 | (1 | ) | 5 | |||||||||||||||
Loss on sale of term loan note receivable | 3,441 | — | 3,441 | — | ||||||||||||||||
Changes in operating assets and liabilities, excluding effects of acquisitions of businesses: | ||||||||||||||||||||
Accounts receivable | 5,491 | 26,111 | (20,991 | ) | 2,679 | |||||||||||||||
Prepaid expenses and other current assets | 2,445 | 576 | 427 | 2,803 | ||||||||||||||||
Income tax receivable | 1,476 | 744 | 915 | 201 | ||||||||||||||||
Aircraft support parts, net | (8,808 | ) | (10,219 | ) | (32,001 | ) | (27,355 | ) | ||||||||||||
Other non-current assets | 1,172 | — | (3,131 | ) | — | |||||||||||||||
Accounts payable | 1,238 | 409 | (19,502 | ) | (85 | ) | ||||||||||||||
Accrued and other current liabilities | (9,090 | ) | (10,655 | ) | (6,350 | ) | 199 | |||||||||||||
Income tax payable | (1,560 | ) | 4,896 | (304 | ) | 6,215 | ||||||||||||||
Other long-term liabilities | 178 | (2,392 | ) | 342 | (2,912 | ) | ||||||||||||||
Uncertain tax positions | (1,588 | ) | — | (856 | ) | — | ||||||||||||||
Net cash provided by (used in) operating activities | 1,039 | 9,067 | (24,792 | ) | 28,158 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisition of businesses, net of cash acquired | 5,000 | — | (226,868 | ) | — | |||||||||||||||
Restricted cash | 16 | (4 | ) | 958 | 1,438 | |||||||||||||||
Purchases of aircraft and property, plant and equipment | (23,738 | ) | (18,395 | ) | (56,104 | ) | (22,736 | ) | ||||||||||||
Purchases of intangible assets | (5 | ) | — | (2,205 | ) | — | ||||||||||||||
Dividends paid to noncontrolling interest | — | — | (341 | ) | (297 | ) | ||||||||||||||
Sale of term loan note receivable | 1,660 | — | 1,660 | — | ||||||||||||||||
Decrease (increase) in other assets | — | 129 | (35 | ) | 103 | |||||||||||||||
Net cash provided by (used in) investing activities | (17,067 | ) | (18,270 | ) | (282,935 | ) | (21,492 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of common stock, net of expenses | — | — | — | 31,454 | ||||||||||||||||
Repayments of subordinated notes | — | — | (27,572 | ) | — | |||||||||||||||
Repayments of credit facilities | (35,416 | ) | (89,049 | ) | (250,215 | ) | (327,063 | ) | ||||||||||||
Borrowings from credit facilities | 48,990 | 98,747 | 246,377 | 291,234 | ||||||||||||||||
Borrowing of notes | — | — | 400,000 | — | ||||||||||||||||
Repayments of notes | — | — | (45,000 | ) | — | |||||||||||||||
Debt issuance costs | (319 | ) | (102 | ) | (14,986 | ) | (376 | ) | ||||||||||||
Shares withheld for payment of taxes | (19 | ) | (695 | ) | (716 | ) | (695 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 13,236 | 8,901 | 307,888 | (5,446 | ) | |||||||||||||||
Effect of foreign currency exchange rates on cash and cash equivalents | (629 | ) | — | 252 | (20 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | (3,421 | ) | (302 | ) | 413 | 1,200 | ||||||||||||||
Cash and cash equivalents at beginning of period | 5,302 | 1,770 | 1,468 | 268 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 1,881 | $ | 1,468 | $ | 1,881 | $ | 1,468 | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||||||
Cash paid during the period for interest | 15,998 | 1,683 | $ | 27,818 | $ | 3,655 | ||||||||||||||
Cash paid (received) during the period for income taxes, net | 506 | 578 | $ | 1,477 | $ | 1,104 | ||||||||||||||
The following tables provide additional detail on the revenues and revenue flight hours for the components of the two reportable segments:
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Government revenues: | ||||||||||||||||
Firefighting | $ | 17,824 | $ | 14,387 | $ | 86,266 | $ | 82,211 | ||||||||
Defense and security | 47,696 | — | 124,491 | — | ||||||||||||
Transport and other government-related services | 1,691 | 3,319 | 10,824 | 23,647 | ||||||||||||
Total Government revenues | $ | 67,211 | $ | 17,706 | $ | 221,581 | $ | 105,858 | ||||||||
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Commercial revenues: | ||||||||||||||||
Timber harvesting | $ | 7,714 | $ | 7,622 | $ | 34,631 | $ | 32,039 | ||||||||
Infrastructure construction | 14,960 | 6,119 | 49,301 | 31,201 | ||||||||||||
Manufacturing / MRO | 2,580 | 7,630 | 12,708 | 11,726 | ||||||||||||
Total Commercial revenues | $ | 25,254 | $ | 21,371 | $ | 96,640 | $ | 74,966 | ||||||||
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Government revenue flight hours: | ||||||||||||||||
Firefighting | 272 | 177 | 3,521 | 3,723 | ||||||||||||
Defense and security | 4,610 | — | 13,208 | — | ||||||||||||
Transport and other government-related services | 43 | 16 | 495 | 1,375 | ||||||||||||
Total Government flight hours | 4,925 | 193 | 17,224 | 5,098 | ||||||||||||
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Commercial revenue flight hours: | ||||||||||||||||
Timber harvesting | 1,143 | 1,131 | 4,967 | 4,527 | ||||||||||||
Infrastructure construction and other | 581 | 442 | 2,875 | 2,450 | ||||||||||||
Total Commercial flight hours | 1,724 | 1,573 | 7,842 | 6,977 | ||||||||||||
Use of Non-GAAP Financial Measures
The Company uses adjusted EBITDA (“Adjusted EBITDA”) in managing our business. We define EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes, and depreciation and amortization. Adjusted EBITDA means, with respect to any fiscal period, our EBITDA, adjusted for, without duplication, the sum of the following amounts for such period to the extent included in determining consolidated net earnings (or loss) for such period: (i) extraordinary gains, (ii) non-cash items increasing consolidated net earnings for such period, excluding any items representing the impact of purchase accounting or the reversal of any accrual of, or cash reserve for, anticipated changes in any period, (iii) non-cash extraordinary losses, (iv) any other non-cash charges reducing consolidated net earnings for such period, excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period or amortization of a prepaid cash expense that was paid in a prior period, (v) to the extent not capitalized, (A) non-recurring expenses, fees, costs and charges incurred and funded prior to, on or within 9 months after the closing date in connection with the ABL Revolver and the Evergreen Helicopters acquisition; and (B) expenses incurred and funded prior to, on, or within 2 years of the closing date in connection with the termination of the lease for the location that is the chief executive office of Evergreen Helicopters as of the closing date; and (vi) transaction related expenditures incurred and funded prior to, on or within 9 months of the date of consummation of (A) the Air Amazonia acquisition, (B) any permitted acquisition under the ABL Revolver, or (C) any investment that is permitted pursuant to the ABL Revolver, in the case of each of (A), (B), and (C), that arise out of cash charges related to deferred stock compensation, management bonuses, strategic market reviews, restructuring, retention bonuses, consolidation, severance or discontinuance of any portion of operations, termination of the lease for the headquarters of Evergreen Helicopters, employees or management of the target of such permitted acquisition, accrued vacation payments and working notices payments and other non-cash accounting adjustments.
The Company also uses adjusted EBITDAR in managing our business. Adjusted EBITDAR is determined by adding aircraft lease expense to adjusted EBITDA. We present Adjusted EBITDAR because we believe this provides us with a more comparable measure for managing our business.
The Company also uses adjusted net income, adjusted operating income, and adjusted net income per share, in managing our business. We define adjusted operating income as operating income (loss) attributable to the Company, adjusted to exclude the effect of acquisition, integration and related expenses. We define adjusted net income as net income (loss) attributable to the Company, adjusted to exclude the effect of acquisition and integration related expenses and related tax effects. We define adjusted net income per share in the same manner, divided by the same number of shares of common stock used in calculating GAAP net income per share. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and should not be considered measures of the Company’s liquidity. The non-GAAP financial measures are provided as additional information to help both management and investors compare business trends among different reporting periods on a consistent and more meaningful basis and enhance investors’ overall understanding of the Company’s current financial performance and prospects for the future.
The following tables reconcile the non-GAAP financial measures appearing in this press release to the most directly comparable GAAP measures:
Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
EBITDA, Adjusted EBITDA and Adjusted EBITDAR Reconciliation: | ||||||||||||||||||||
Net income (loss) attributable to Erickson Air-Crane, Inc. | $ | (1,700 | ) | $ | (949 | ) | $ | 9,657 | $ | 15,230 | ||||||||||
Interest expense, net | 8,658 | 1,453 | 25,175 | 6,990 | ||||||||||||||||
Tax expense (benefit) | (889 | ) | 45 | 6,120 | 10,213 | |||||||||||||||
Depreciation and amortization | 7,889 | 5,248 | 33,328 | 21,661 | ||||||||||||||||
Amortization of debt issuance costs | 681 | 322 | 2,067 | 1,174 | ||||||||||||||||
EBITDA | $ | 14,639 | $ | 6,119 | $ | 76,347 | $ | 55,268 | ||||||||||||
Acquisition and integration related expenses | 1,628 | — | 10,383 | — | ||||||||||||||||
Non-cash unrealized mark-to-market foreign exchange (gains) losses | (10 | ) | 350 | (309 | ) | 322 | ||||||||||||||
Interest related to tax contingencies | (858 | ) | — | 13 | — | |||||||||||||||
Loss on early extinguishment of debt | — | — | 215 | — | ||||||||||||||||
Non-cash charges from awards to employees of equity interests | 127 | 389 | 792 | 2,118 | ||||||||||||||||
Other non-cash (gains) losses | 40 | 5 | (1 | ) | (795 | ) | ||||||||||||||
Loss on sale of EIA note (1) | 3,441 | — | 3,441 | — | ||||||||||||||||
Adjusted EBITDA | $ | 19,007 | $ | 6,863 | $ | 90,881 | $ | 56,913 | ||||||||||||
Aircraft lease expenses | 5,378 | — | 14,005 | — | ||||||||||||||||
Adjusted EBITDAR | $ | 24,385 | $ | 6,863 | $ | 104,886 | $ | 56,913 | ||||||||||||
(1) | While the sale of the EIA note is not included in the definition of Adjusted EBITDA and Adjusted EBITDAR as described above, the Company believes this amount should be added to the calculation for EBITDA, Adjusted EBITDA and Adjusted EBITDAR to provide us with a more comparable measure for managing our business. | |||
Quarter Ended | Year Ended | |||||||||
December 31, | December 31, | |||||||||
2013 | 2013 | |||||||||
Operating Income and Adjusted Operating Income Reconciliation | ||||||||||
Operating income (loss) | $ | 9,153 | $ | 46,992 | ||||||
Acquisition and integration related expenses | 1,628 | 10,383 | ||||||||
Adjusted Operating income (loss) | 10,781 | 57,375 | ||||||||
Net Income and Adjusted Net Income Reconciliation | ||||||||||
Net income (loss) attributable to Erickson Air-Crane Incorporated | $ | (1,700 | ) | $ | 9,657 | |||||
Loss on sale of EIA note | 3,441 | 3,441 | ||||||||
Tax effect of loss on sale of EIA note (assumed 40% rate) | (1,376 | ) | (1,376 | ) | ||||||
Acquisition and integration related expenses | 1,628 | 10,383 | ||||||||
Tax effect of acquisition and integration related expenses (assumed 40% rate) | (651 | ) | (4,153 | ) | ||||||
Net impact of acquisition and integration related costs on net income | 3,042 | 8,295 | ||||||||
Adjusted net income (loss) attributable to Erickson Air-Crane Incorporated | $ | 1,342 | $ | 17,952 | ||||||
Net Income (Loss) Per Share Attributable To Common Stockholders and Adjusted Net Income (Loss) Per Share Attributable to Common Stockholders Reconciliation | ||||||||||
Net income (loss) attributable to common stockholders | $ | (1,700 | ) | $ | 9,657 | |||||
Adjusted net income (loss) attributable to Erickson Air-Crane Incorporated | $ | 1,342 | $ | 17,952 | ||||||
Weighted average shares outstanding | ||||||||||
Basic | 13,786,308 | 11,221,005 | ||||||||
Diluted | 13,846,180 | 11,834,506 | ||||||||
Adjusted net income (loss) per share attributable to common stockholders | ||||||||||
Basic | $ | 0.10 | $ | 1.60 | ||||||
Diluted | $ | 0.10 | $ | 1.52 |
Contacts:
ICR, Inc.
James Palczynski, 203-247-2095
jp@icrinc.com
or
Media:
Erickson
Brian
Carlson, 503-505-5884
bcarlson@ericksonaviation.com