Era Group Inc. Reports Second Quarter 2016 Results
/EINPresswire.com/ -- HOUSTON, TX -- (Marketwired) -- 08/02/16 -- Era Group Inc. (NYSE: ERA) (the "Company") today reported net income attributable to the Company of $1.9 million, or $0.09 per diluted share, for its second quarter ended June 30, 2016 ("current quarter") on operating revenues of $63.4 million compared to net income attributable to the Company of $11.3 million, or $0.55 per diluted share, for the quarter ended June 30, 2015 ("prior year quarter") on operating revenues of $70.7 million. During the current quarter, the Company and its partner in its Brazilian joint venture, Aeróleo Taxi Aero S/A ("Aeróleo"), each contributed notes payable to them by Aeróleo as a contribution of additional capital into Aeróleo. As a result of this transaction, the Company reduced total debt by the $6.3 million of notes that were contributed by its partner in Aeróleo and recorded a $6.3 million loss attributable to noncontrolling interest in a subsidiary, which increased net income attributable to the Company by the same amount. Excluding the impact of this transaction, net loss attributable to the Company would have been $4.4 million, or $0.21 per diluted share, in the current quarter.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $10.7 million in the current quarter compared to $33.2 million in the prior year quarter. EBITDA adjusted to exclude gains on asset dispositions and special items was $8.8 million in the current quarter compared to $20.5 million in the prior year quarter. Gains on asset dispositions were $1.4 million in the current quarter compared to a loss of $0.2 million in the prior year quarter. Special items consisted of a pre-tax gain on debt extinguishment of $0.5 million in the current quarter and a pre-tax gain of $12.9 million on the sale of the Company's fixed base operations ("FBO") business in Alaska in the prior year quarter.
"Industry conditions remain very challenging, and the second quarter represented our lowest level of Adjusted EBITDA in the last several years," said Chris Bradshaw, President and Chief Executive Officer of Era Group Inc. "Despite the difficult market environment, Era generated $14 million of cash flow from operating activities in the quarter, and with our strong balance sheet and ample liquidity position, we remain well positioned to withstand the pressures of a prolonged industry downturn."
Second Quarter Results
Operating revenues in the current quarter were $7.4 million lower than the prior year quarter primarily due to lower utilization and lower average rates in our U.S. oil and gas operations, the end of certain dry-leasing contracts and the sale of our FBO in Alaska in May 2015. These decreases were partially offset by the consolidation of Aeróleo and the start of a new contract in Suriname.
Operating expenses were $7.6 million higher in the current quarter primarily due to the consolidation of Aeróleo and increased repairs and maintenance expenses, partially offset by decreased personnel expenses and non-income taxes in the U.S.
Administrative and general expenses were $2.6 million lower in the current quarter primarily due to reduced headcount and compensation expense in the U.S., the collection of a previously reserved receivable and reduced professional services expenses, partially offset by the consolidation of Aeróleo.
Depreciation and amortization expense was $1.3 million higher in the current quarter due to the addition of new helicopters, a base expansion project and investments in additional information technology infrastructure.
Gains on asset dispositions were $1.6 million higher in the current quarter. We sold or otherwise disposed of two helicopters and related equipment in the current quarter for proceeds of $1.9 million resulting in gains of $1.4 million. In the prior year quarter, we sold five helicopters and related equipment for proceeds of $3.0 million resulting in book losses of $0.2 million.
Interest expense was $1.2 million higher in the current quarter primarily due to the cessation of capitalized interest on helicopter deposits, partially offset by savings resulting from the cumulative repurchases of a portion of our 7.750% senior unsecured notes (the "7.750% Senior Notes").
Gain on debt extinguishment was $0.5 million in the current quarter due to the repurchase of a portion of our 7.750% Senior Notes.
Equity earnings were $0.6 million in the current quarter compared to a loss of $0.2 million in the prior year quarter primarily due to improved earnings from our Dart Holding Company Ltd. ("Dart") joint venture.
Sequential Quarter Results
Operating revenues in the current quarter were $0.8 million higher compared to the quarter ended March 31, 2016 ("preceding quarter") primarily due to the start of seasonal activities in Alaska, a new contract in Suriname and increased revenues in Brazil and Colombia, partially offset by decreased revenues in the U.S. Gulf of Mexico and the bankruptcy of a dry-leasing customer.
Operating expenses were $3.1 million higher in the current quarter primarily due to the start of seasonal activities in Alaska, increased fuel expenses in Brazil and reduced vendor credits. In addition, nonrecurring expenses in the current quarter included $0.4 million of severance costs related to headcount reductions in Brazil and the U.S. and $0.5 million of workers' compensation expense related to an accident in Alaska.
Administrative and general expenses were $1.1 million lower in the current quarter primarily due to the collection of a previously reserved receivable and lower personnel costs.
EBITDA was $1.6 million lower compared to the preceding quarter. EBITDA adjusted to exclude gains on asset dispositions and special items was $0.5 million lower. Gains on asset dispositions were $1.5 million lower compared to the preceding quarter. Special items in the current quarter consisted of the gain on debt extinguishment noted above, and there were no special items in the preceding quarter.
Equity earnings were $0.6 million higher in the current quarter primarily due to improved earnings at our Dart joint venture.
Six Months Results
The Company reported a net loss of $1.9 million, or $0.09 per diluted share, for the six months ended June 30, 2016 ("current six months") on operating revenues of $125.9 million compared to net income of $11.3 million, or $0.55 per diluted share, for the six months ended June 30, 2015 ("prior year period") on operating revenues of $138.2 million.
EBITDA was $22.9 million in the current six months compared to $47.8 million in the prior year period. EBITDA adjusted to exclude gains on asset dispositions and special items was $18.1 million in the current six months compared to $31.5 million in the prior year period. Gains on asset dispositions were $4.3 million in the current six months compared to $3.1 million in the prior year period. Special items in the current six months consisted of a gain on debt extinguishment of $0.5 million. Special items in the prior year period consisted of a gain on the sale of the FBO of $12.9 million and gains on debt extinguishment of $0.3 million.
Operating revenues in the current six months were $12.2 million lower than the prior year period primarily due to lower utilization and lower average rates in our U.S. oil and gas operations, the end of certain dry-leasing contracts and the sale of the FBO, partially offset by the consolidation of Aeróleo and the start of a new contract in Suriname.
Operating expenses were $8.3 million higher in the current six months primarily due to the consolidation of Aeróleo and increased repairs and maintenance expenses, partially offset by reductions in operating expenses in the U.S. due to reduced activity, lower headcount and other cost control measures.
Administrative and general expenses were $3.2 million lower in the current six months primarily due to reduced headcount and compensation expenses in the U.S., the collection of a previously reserved receivable and the end of the Amended and Restated Transition Services Agreement with SEACOR Holdings Inc., partially offset by the consolidation of Aeróleo.
Depreciation and amortization expense was $2.5 million higher in the current six months due to the addition of new helicopters, a base expansion project and investments in additional information technology infrastructure.
Interest expense was $2.5 million higher in the current six months due to the cessation of capitalized interest on helicopter deposits, partially offset by savings resulting from the cumulative repurchases of a portion of our 7.750% Senior Notes.
Foreign exchange gains were $0.6 million in the current six months primarily due to the strengthening of the Brazilian real resulting in gains on our real-denominated balances. Foreign exchange losses were $2.4 million in the prior year period primarily due to the settlement of forward currency contracts and the weakening of the euro resulting in losses on our euro-denominated balances.
Equity earnings were $0.6 million in the current six months compared to a loss of $0.3 million in the prior year period primarily due to improved earnings from our Dart joint venture.
Fleet Update
We continue to experience excess capacity in our medium and heavy helicopters. Excess helicopters include our helicopters other than those under customer contracts, undergoing maintenance, dedicated for charter activity or models subject to operational suspension. We are focused on maximizing the utilization of our fleet and reducing the excess capacity in our medium and heavy helicopters through fleet management initiatives, participation in competitive bids and the pursuit of other opportunities. In addition, we may sell certain helicopters on an opportunistic basis consistent with our long-standing strategy.
Due to an accident in April 2016 involving an Airbus Helicopters EC225LP (also known as a H225) model helicopter operated by another helicopter company, the civilian fleet of H225 and AS332 L2 model helicopters remains on operational suspension. We own nine H225 helicopters, including five that are currently located in the U.S., three that are currently located in Brazil and one that is currently located in Norway. As of June 30, 2016, the net book value of our H225 helicopters and related inventory of parts and equipment was $164.5 million. During this suspension of H225 operations, we expect to utilize other heavy and medium helicopters to service our operations. Although we do not expect the near-term impact of the suspension to be material to our financial condition or results of operations, it is too early to estimate the full extent or duration of the H225 suspension, the market receptivity of the H225 helicopter for future oil and gas operations and the potential impact on residual values of these helicopters.
Capital Commitments
We had unfunded capital commitments of $152.7 million as of June 30, 2016, of which $39.4 million is payable during the remainder of 2016 with the balance payable through 2018. We may terminate $125.8 million of our total commitments (inclusive of deposits paid on options not yet exercised) without further liability other than aggregate liquidated damages of $3.0 million. The noncancellable portion of our commitments payable during the remainder of 2016 is $13.4 million.
Included in these capital commitments are agreements to purchase seven AW189 heavy helicopters, two S92 heavy helicopters and five AW169 light twin helicopters. The AW189 and S92 helicopters are scheduled to be delivered beginning in 2016 through 2018. Delivery dates for the AW169 helicopters have yet to be determined. In addition, we had outstanding options to purchase up to an additional ten AW189 helicopters and one S92 helicopter. If these options are exercised, the helicopters would be scheduled for delivery beginning in 2017 through 2018.
Capital Allocation and Liquidity
As of June 30, 2016, we had $39.2 million of cash and, based on operating results through June 30, 2016, $170.4 million of remaining availability under our senior secured revolving credit facility (the "Facility") for total liquidity of $209.6 million. As of June 30, 2016, our funded debt-to-EBITDA and interest coverage ratios, as defined in the Facility, were 3.0x and 5.7x, respectively. A description of these metrics is included in the financial tables in this release.
Conference Call
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, August 3, 2016, to review the results for the second quarter ended June 30, 2016. The conference call can be accessed as follows:
All callers will need to reference the access code 5689452.
Within the U.S.: Operator Assisted Toll-Free Dial-In Number: (888) 397-5355
Outside the U.S.: Operator Assisted International Dial-In Number: (719) 325-2436
Replay
A telephone replay will be available through August 17, 2016 and may be accessed by calling (888) 203-1112 for domestic callers or (719) 457-0820 for international callers. An audio replay will also be available on the Company's website at www.eragroupinc.com shortly after the call and will be accessible through August 17, 2016.
For additional information concerning Era Group, contact Andrew Puhala at (713) 369-4646 or visit Era Group's website at www.eragroupinc.com.
About Era Group
Era Group is one of the largest helicopter operators in the world and the longest serving helicopter transport operator in the U.S. In addition to servicing its U.S. customers, Era Group provides helicopters and related services to customers and third-party helicopter operators in other countries, including Brazil, Colombia, the Dominican Republic, India, Spain, Suriname and the United Kingdom. Era Group's helicopters are primarily used to transport personnel to, from and between offshore oil and gas production platforms, drilling rigs and other installations.
Forward-Looking Statements Disclosure
Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others, the Company's dependence on, and the cyclical and volatile nature of, offshore oil and gas exploration, development and production activity, and the impact of general economic conditions and fluctuations in worldwide prices of and demand for oil and natural gas on such activity levels; the Company's reliance on a small number of customers and the reduction of its customer base resulting from consolidation; cost-saving initiatives implemented by the Company's customers; risks inherent in operating helicopters; the Company's ability to maintain an acceptable safety record; the Company's ability to successfully expand into other geographic and helicopter service markets; the impact of increased U.S. and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities; risks of engaging in competitive processes or expending significant resources with no guaranty of recoupment; risks of a grounding of all or a portion of the Company's fleet for extended periods of time or indefinitely; risks that the Company's customers reduce or cancel contracted services or tender processes; the Company's reliance on a small number of helicopter manufacturers and suppliers; risks associated with political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of the Company's assets or result in claims of a force majeure situation; the impact of declines in the global economy and financial markets; the impact of fluctuations in foreign currency exchange rates on the Company's cost to purchase helicopters, spare parts and related services and on asset values; the Company's credit risk exposure; the Company's ongoing need to replace aging helicopters; the Company's reliance on the secondary helicopter market to dispose of older helicopters and related equipment; the Company's reliance on information technology; the impact of allocation of risk between the Company and its customers; the liability, legal fees and costs in connection with providing emergency response services; risks associated with the Company's debt structure; the impact of operational and financial difficulties of the Company's joint ventures and partners; conflict with the other owners of the Company's non-wholly owned subsidiaries and other equity investees; adverse results of legal proceedings; adverse weather conditions and seasonality; the Company's ability to obtain insurance coverage and the adequacy and availability of such coverage; the possibility of labor problems; the attraction and retention of qualified personnel; restrictions on the amount of foreign ownership of the Company's common stock; and various other matters and factors, many of which are beyond the Company's control. In addition, these statements constitute Era Group's cautionary statements under the Private Securities Litigation Reform Act of 1995. It is not possible to predict or identify all such factors. Consequently, the foregoing should not be considered a complete discussion of all potential risks or uncertainties. The words "estimate," "project," "intend," "believe," "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. Era Group disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in Era Group's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this release should be evaluated together with the many uncertainties that affect the Company's businesses, particularly those mentioned under "Risk Factors" in Era Group's Annual Report on Form 10-K/A for the year ended December 31, 2015, in Era Group's subsequent Quarterly Reports on Form 10-Q and in Era Group's current reporting on Form 8-K (if any), which are incorporated by reference.
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
Operating revenues $ 63,351 $ 70,738 $ 125,933 $ 138,153
----------- ----------- ----------- -----------
Costs and expenses:
Operating 47,396 39,784 91,703 83,389
Administrative and
general 8,140 10,779 17,367 20,522
Depreciation and
amortization 12,691 11,398 25,457 23,000
----------- ----------- ----------- -----------
Total costs and
expenses 68,227 61,961 134,527 126,911
----------- ----------- ----------- -----------
Gains (losses) on asset
dispositions, net 1,367 (242) 4,280 3,146
----------- ----------- ----------- -----------
Operating income (loss) (3,509) 8,535 (4,314) 14,388
----------- ----------- ----------- -----------
Other income (expense):
Interest income 403 317 704 568
Interest expense (4,130) (2,881) (8,878) (6,426)
Derivative losses, net -- (10) -- (22)
Foreign currency gains
(losses), net 329 543 610 (2,417)
Gain on debt
extinguishment 518 -- 518 264
Gain on sale of FBO -- 12,946 -- 12,946
Other, net 46 (9) 29 (9)
----------- ----------- ----------- -----------
Total other income
(expense) (2,834) 10,906 (7,017) 4,904
----------- ----------- ----------- -----------
Income (loss) before
income taxes and equity
earnings (6,343) 19,441 (11,331) 19,292
Income tax expense
(benefit) (1,232) 8,138 (2,246) 8,083
----------- ----------- ----------- -----------
Income (loss) before
equity earnings (5,111) 11,303 (9,085) 11,209
Equity earnings
(losses), net of tax 601 (198) 625 (343)
----------- ----------- ----------- -----------
Net income (loss) (4,510) 11,105 (8,460) 10,866
Net loss attributable to
non-controlling
interest in subsidiary 6,448 228 6,580 425
----------- ----------- ----------- -----------
Net income (loss)
attributable to Era
Group Inc. $ 1,938 $ 11,333 $ (1,880) $ 11,291
=========== =========== =========== ===========
Income (loss) per common
share, basic $ 0.09 $ 0.55 $ (0.09) $ 0.55
Income (loss) per common
share, diluted $ 0.09 $ 0.55 $ (0.09) $ 0.55
Weighted average common
shares outstanding,
basic 20,361,533 20,273,780 20,290,735 20,235,082
Weighted average common
shares outstanding,
diluted 20,364,382 20,332,657 20,290,735 20,295,498
EBITDA $ 10,676 $ 33,205 $ 22,925 $ 47,807
Adjusted EBITDA $ 10,158 $ 20,259 $ 22,407 $ 34,597
Adjusted EBITDA
excluding gains $ 8,791 $ 20,501 $ 18,127 $ 31,451
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
Three Months Ended
-----------------------------------------------------------
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2016 2016 2015 2015 2015
----------- ----------- ----------- ----------- -----------
Operating
revenues $ 63,351 $ 62,582 $ 73,943 $ 69,741 $ 70,738
----------- ----------- ----------- ----------- -----------
Costs and
expenses:
Operating 47,396 44,307 45,085 43,007 39,784
Administrative
and general 8,140 9,227 11,052 11,238 10,779
Depreciation
and
amortization 12,691 12,766 12,151 12,186 11,398
----------- ----------- ----------- ----------- -----------
Total costs
and expenses 68,227 66,300 68,288 66,431 61,961
----------- ----------- ----------- ----------- -----------
Gains (losses)
on asset
dispositions,
net 1,367 2,913 994 1,813 (242)
Goodwill
impairment -- -- (1,866) -- --
----------- ----------- ----------- ----------- -----------
Operating
income (loss) (3,509) (805) 4,783 5,123 8,535
----------- ----------- ----------- ----------- -----------
Other income
(expense):
Interest
income 403 301 391 232 317
Interest
expense (4,130) (4,748) (3,979) (3,121) (2,881)
Derivative
gains
(losses), net -- -- (4) 8 (10)
Foreign
currency
gains
(losses), net 329 281 (319) 146 543
Gain (loss) on
debt
extinguishment 518 -- 1,369 (16) --
Gain on sale
of FBO -- -- -- -- 12,946
Other, net 46 (17) 54 -- (9)
----------- ----------- ----------- ----------- -----------
Total other
income
(expense) (2,834) (4,183) (2,488) (2,751) 10,906
----------- ----------- ----------- ----------- -----------
Income (loss)
before income
taxes and
equity
earnings (6,343) (4,988) 2,295 2,372 19,441
Income tax
expense
(benefit) (1,232) (1,014) 4,691 1,343 8,138
----------- ----------- ----------- ----------- -----------
Income (loss)
before equity
earnings (5,111) (3,974) (2,396) 1,029 11,303
Equity earnings
(losses), net
of tax 601 24 (1,224) (376) (198)
----------- ----------- ----------- ----------- -----------
Net income
(loss) (4,510) (3,950) (3,620) 653 11,105
Net loss
attributable
to non-
controlling
interest in
subsidiary 6,448 132 173 208 228
----------- ----------- ----------- ----------- -----------
Net income
(loss)
attributable
to Era Group
Inc. $ 1,938 $ (3,818)$ (3,447)$ 861 $ 11,333
=========== =========== =========== =========== ===========
Earnings (loss)
per common
share, basic $ 0.09 $ (0.19)$ (0.17)$ 0.04 $ 0.55
Earnings (loss)
per common
share, diluted $ 0.09 $ (0.19)$ (0.17)$ 0.04 $ 0.55
Weighted
average common
shares
outstanding,
basic 20,361,533 20,219,937 20,183,027 20,260,514 20,273,780
Weighted
average common
shares
outstanding,
diluted 20,364,382 20,219,937 20,183,027 20,287,069 20,332,657
EBITDA $ 10,676 $ 12,249 $ 16,810 $ 17,071 $ 33,205
Adjusted EBITDA $ 10,158 $ 12,249 $ 17,307 $ 17,087 $ 20,259
Adjusted EBITDA
excluding
gains $ 8,791 $ 9,336 $ 16,313 $ 15,274 $ 20,501
ERA GROUP INC.
OPERATING REVENUES BY LINE OF SERVICE
(unaudited, in thousands)
Three Months Ended
-------------------------------------------
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2016 2016 2015 2015 2015
-------- -------- -------- -------- -------
Oil and gas:(1)
U.S. Gulf of Mexico $ 33,312 $ 36,812 $ 40,368 $ 42,132 $41,821
Alaska 1,273 932 3,309 5,429 6,009
International 16,848 14,054 18,865 60 47
-------- -------- -------- -------- -------
Total oil and gas 51,433 51,798 62,542 47,621 47,877
Dry-leasing 2,827 3,995 4,643 11,925 12,233
Search and rescue 4,590 4,891 4,955 4,418 4,989
Air medical services 2,007 1,898 1,803 1,854 1,914
Flightseeing 2,494 -- -- 3,923 3,118
Fixed base operations -- -- -- -- 614
Eliminations -- -- -- -- (7)
-------- -------- -------- -------- -------
$ 63,351 $ 62,582 $ 73,943 $ 69,741 $70,738
======== ======== ======== ======== =======
FLIGHT HOURS BY LINE OF SERVICE(2)
(unaudited)
Three Months Ended
--------------------------------------------
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2016 2016 2015 2015 2015
-------- -------- -------- -------- --------
Oil and gas:(1)
U.S. Gulf of Mexico 7,153 7,290 8,255 9,435 8,717
Alaska 78 77 380 797 732
International 2,535 2,332 3,055 22 14
-------- -------- -------- -------- --------
Total oil and gas 9,766 9,699 11,690 10,254 9,463
Search and rescue 199 201 275 265 260
Air medical services 832 618 748 949 826
Flightseeing 679 -- -- 1,502 1,118
-------- -------- -------- -------- --------
11,476 10,518 12,713 12,970 11,667
======== ======== ======== ======== ========
(1) Primarily oil and gas services, but also includes revenues from
activities such as firefighting and utility support.
(2) Does not include hours flown by helicopters in our dry-leasing line of
service.
ERA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2016 2016 2015 2015 2015
---------- ---------- ---------- ---------- ----------
ASSETS
Current assets:
Cash and cash
equivalents $ 39,160 $ 30,803 $ 14,370 $ 13,808 $ 17,002
Receivables:
Trade, net of
allowance for
doubtful
accounts 36,830 36,980 48,639 39,498 39,866
Tax
receivables 6,011 6,068 6,085 114 105
Other 3,641 3,707 3,305 2,399 2,005
Inventories,
net 27,764 27,744 27,994 24,932 25,808
Prepaid
expenses 2,563 3,274 1,963 3,055 3,847
Deferred income
taxes -- -- -- 2,276 2,507
Other current
assets 191 191 191 2,297 6,762
---------- ---------- ---------- ---------- ----------
Total current
assets 116,160 108,767 102,547 88,379 97,902
---------- ---------- ---------- ---------- ----------
Property and
equipment 1,172,242 1,171,271 1,175,909 1,175,693 1,192,445
Accumulated
depreciation (336,722) (325,363) (316,693) (311,070) (314,484)
---------- ---------- ---------- ---------- ----------
Net property
and equipment 835,520 845,908 859,216 864,623 877,961
---------- ---------- ---------- ---------- ----------
Equity
investments and
advances 29,299 28,795 28,898 30,256 30,945
Goodwill -- -- -- 1,589 1,823
Intangible
assets 1,148 1,153 1,158 1,411 1,410
Other assets 12,719 12,850 12,532 9,164 10,890
---------- ---------- ---------- ---------- ----------
Total assets $ 994,846 $ 997,473 $1,004,351 $ 995,422 $1,020,931
========== ========== ========== ========== ==========
LIABILITIES,
REDEEMABLE
NONCONTROLLING
INTEREST AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable and
accrued
expenses $ 15,473 $ 10,119 $ 12,000 $ 12,037 $ 12,026
Accrued wages
and benefits 9,565 6,244 9,012 7,861 7,293
Accrued
interest 612 3,491 562 3,992 813
Accrued income
taxes -- -- -- 7,415 7,613
Derivative
instruments -- -- -- 71 192
Accrued other
taxes 2,515 1,905 2,520 1,259 968
Accrued
contingencies 1,280 2,851 2,410 -- --
Current portion
of long-term
debt 1,569 2,291 3,278 25,335 26,130
Other current
liabilities 2,184 1,775 2,300 3,476 2,588
---------- ---------- ---------- ---------- ----------
Total current
liabilities 33,198 28,676 32,082 61,446 57,623
---------- ---------- ---------- ---------- ----------
Long-term debt 252,940 263,590 263,698 239,515 264,014
Deferred income
taxes 227,933 229,083 229,848 213,998 218,802
Deferred gains
and other
liabilities 4,418 2,855 2,616 1,956 1,994
---------- ---------- ---------- ---------- ----------
Total
liabilities 518,489 524,204 528,244 516,915 542,433
---------- ---------- ---------- ---------- ----------
Redeemable
noncontrolling
interest 4,573 4,672 4,804 4,783 5,195
Equity:
Era Group Inc.
stockholders'
equity:
Common stock 211 211 207 207 206
Additional
paid-in
capital 435,714 434,460 433,175 432,774 431,233
Retained
earnings 38,622 36,684 40,502 43,949 43,088
Treasury
shares, at
cost (2,855) (2,850) (2,673) (2,632) (563)
Accumulated
other
comprehensive
income
(loss), net
of tax 92 92 92 92 (44)
---------- ---------- ---------- ---------- ----------
Total Era Group
Inc.
stockholders'
equity 471,784 468,597 471,303 474,390 473,920
Non-controlling
interest -- -- -- (666) (617)
---------- ---------- ---------- ---------- ----------
Total equity 471,784 468,597 471,303 473,724 473,303
---------- ---------- ---------- ---------- ----------
Total
liabilities,
redeemable
noncontrolling
interest and
stockholders'
equity $ 994,846 $ 997,473 $1,004,351 $ 995,422 $1,020,931
========== ========== ========== ========== ==========
Our management uses EBITDA and Adjusted EBITDA to assess the performance and operating results of our business. EBITDA is defined as Earnings before Interest (includes interest income and interest expense), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for certain items noted in the reconciliation below that occur during the reported period. We include EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance. Neither EBITDA nor Adjusted EBITDA is a recognized term under generally accepted accounting principles in the U.S. ("GAAP"). Accordingly, they should not be used as an indicator of, or an alternative to, net income as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management's discretionary use, as they do not consider certain cash requirements, such as debt service requirements. Because the definitions of EBITDA and Adjusted EBITDA (or similar measures) may vary among companies and industries, they may not be comparable to other similarly titled measures used by other companies.
The following table provides a reconciliation of Net Income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands).
Three Months Ended Six Months Ended
-------------------------------------------- -----------------
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
2016 2016 2015 2015 2015 2016 2015
------- ------- ------- ------- -------- ------- --------
Net Income
(loss) $(4,510) $(3,950) $(3,620) $ 653 $ 11,105 $(8,460) $ 10,866
Depreciat-
ion and
amortiza-
tion 12,691 12,766 12,151 12,186 11,398 25,457 23,000
Interest
income (403) (301) (391) (232) (317) (704) (568)
Interest
expense 4,130 4,748 3,979 3,121 2,881 8,878 6,426
Income
tax
expense
(benefit) (1,232) (1,014) 4,691 1,343 8,138 (2,246) 8,083
------- ------- ------- ------- -------- ------- --------
EBITDA $10,676 $12,249 $16,810 $17,071 $ 33,205 $22,925 $ 47,807
Special
items
(1) (518) -- 497 16 (12,946) (518) (13,210)
------- ------- ------- ------- -------- ------- --------
Adjusted
EBITDA $10,158 $12,249 $17,307 $17,087 $ 20,259 $22,407 $ 34,597
Losses
(gains)
on asset
dispositions,
net (1,367) (2,913) (994) (1,813) 242 (4,280) (3,146)
------- ------- ------- ------- -------- ------- --------
Adjusted
EBITDA
excluding
gains $ 8,791 $ 9,336 $16,313 $15,274 $ 20,501 $18,127 $ 31,451
======= ======= ======= ======= ======== ======= ========
(1) Special items include the following:
-- In the three months ended June 30, 2016, a gain of $0.5 million on
the extinguishment of debt related to the repurchase of a portion of our
7.750% Senior Notes;
-- In the three months ended December 31, 2015, a pre-tax gain of $1.4
million on the extinguishment of debt related to the repurchase of a
portion of our 7.750% Senior Notes and a pre-tax charge of $1.9 million
on the impairment of our goodwill;
-- In the three months ended September 30, 2015, a pre-tax loss of less
than $0.1 million on the extinguishment of debt related to the
repurchase of a portion of our 7.750% Senior Notes;
-- In the three months ended June 30, 2015, a pre-tax gain of $12.9
million on the sale of our FBO in Alaska; and
-- In the six months ended June 30, 2015, a pre-tax gain of $12.9
million on the sale of the FBO and a gain of $0.3 million on the
extinguishment of debt related to the repurchase of a portion of our
7.750% Senior Notes.
The Facility requires that the Company maintain certain financial ratios on a rolling 12-month basis. The interest coverage ratio is a trailing 12-month quotient of (i) EBITDA (as defined in the Facility) less dividends and distributions divided by (ii) interest expense. The interest coverage ratio is not a measure of operating performance or liquidity defined by GAAP and may not be comparable to similarly titled measures presented by other companies. The funded debt to EBITDA ratio is calculated by dividing (i) the sum of total debt for borrowed money, capital lease obligations and guaranties of obligations of non-consolidated entities by (ii) EBITDA (as defined in the Facility). The funded debt to EBITDA ratio is not a measure of operating performance or liquidity defined by GAAP and may not be comparable to similarly titled measures presented by other companies. EBITDA is calculated under the Facility differently than as presented elsewhere in this release.
ERA GROUP INC.
FLEET COUNTS(1)
(unaudited)
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2016 2016 2015 2015 2015
-------- -------- -------- -------- --------
Heavy:
H225 9 9 9 9 9
S92 2 2 2 -- --
AW189 2 2 2 -- --
-------- -------- -------- -------- --------
13 13 13 9 9
======== ======== ======== ======== ========
Medium:
AW139 38 38 38 39 39
S76 C+/C++ 6 6 6 6 6
S76 A++ -- -- 2 2 2
B212 7 8 8 8 8
B412 1 1 1 2 3
-------- -------- -------- -------- --------
52 53 55 57 58
======== ======== ======== ======== ========
Light--twin engine:
A109 7 7 7 7 7
EC135 17 17 17 17 19
EC145 5 5 5 5 5
BK117 3 3 3 3 3
BO105 3 3 3 3 3
-------- -------- -------- -------- --------
35 35 35 35 37
======== ======== ======== ======== ========
Light--single engine:
A119 14 14 14 16 17
AS350 28 29 29 31 31
-------- -------- -------- -------- --------
42 43 43 47 48
======== ======== ======== ======== ========
Total Helicopters 142 144 146 148 152
======== ======== ======== ======== ========
(1) Includes all owned, joint ventured, leased-in and managed helicopters
and excludes helicopters fully paid for and delivered but not yet placed
in service as of the applicable dates.
For additional information concerning Era Group, contact
Andrew Puhala
(713) 369-4646
or visit Era Group's website at www.eragroupinc.com
