SOURCE: Era Group Inc.

Era Group Inc.

August 04, 2015 18:52 ET

Era Group Inc. Reports Second Quarter 2015 Results

HOUSTON, TX--(Marketwired - Aug 4, 2015) - Era Group Inc. (NYSE: ERA) today reported net income of $11.3 million, or $0.55 per diluted share, for its second quarter ended June 30, 2015 ("current quarter") on operating revenues of $70.7 million compared to net income for the quarter ended June 30, 2014 ("prior year quarter") of $5.2 million, or $0.26 per diluted share, on operating revenues of $86.6 million. Excluding a pre-tax gain of $12.9 million on the sale of the Company's fixed base operations ("FBO") business in Alaska and a one-time net deferred tax expense of $1.0 million in connection with the Sicher acquisition discussed below, current quarter net income would have been $4.1 million, or $0.20 per diluted share.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $33.2 million in the current quarter compared to $23.1 million in the prior year quarter. EBITDA adjusted to exclude gains or losses on asset dispositions and special items was $20.5 million in the current quarter compared to $22.4 million in the prior year quarter. The Company sold five single engine helicopters for losses of $0.2 million in the current quarter compared to gains of $3.1 million in the prior year quarter. Special items in the current quarter consisted of the $12.9 million pre-tax gain on the sale of the Company's FBO business in Alaska. Special items in the prior year quarter consisted of a $2.5 million pre-tax impairment charge related to a probable loss of a note receivable.

"We are pleased to announce strong profitability in the second quarter despite the challenging industry environment," said Chris Bradshaw, President, Chief Executive Officer and Chief Financial Officer of Era Group Inc. "Although operating revenues declined $15.8 million compared to the prior year quarter, EBITDA adjusted to exclude gains on asset sales and special items declined only $1.9 million due to effective cost controls and improved efficiency. I want to thank the entire Era team for their contributions in achieving this 3% margin improvement despite an 18% decline in revenues. As further evidence of the success of these efforts, EBITDA adjusted to exclude gains on asset sales, special items and the effects of foreign currency fluctuations increased by 43% on a sequential quarter basis."

"We are also pleased to announce entry into the Colombian market via the acquisition of Sicher Helicopters SAS. While Colombia has historically been an onshore oil and gas market, the acquisition of Sicher's air operator certificate and existing operations should allow us to capitalize on the growing demand for new generation helicopters, operated with the highest safety standards, to support the international oil and gas companies who are exploring and developing Colombia's promising offshore blocks."

Second Quarter Results

Operating revenues in the current quarter were $15.8 million lower than the prior year quarter primarily due to lower utilization of our medium helicopters and the sale of our FBO business in Alaska.

Operating expenses were $14.9 million lower in the current quarter primarily due to decreased repairs and maintenance expenses, fuel expenses and personnel costs.

Administrative and general expenses were $0.7 million higher primarily due to increased professional service fees.

Gains on asset dispositions were $3.4 million lower in the current quarter. In the current quarter, we sold five single engine helicopters for proceeds of $3.0 million and recognized losses of $0.2 million. During the prior year quarter, we sold one medium helicopter for total proceeds of $3.4 million resulting in gains of $3.1 million.

We sold our FBO business in Alaska during the current quarter for cash proceeds of $14.3 million and a pre-tax gain of $12.9 million.

Equity earnings were $0.7 million lower in the current quarter primarily due to the absence of earnings from Lake Palma S.A. ("Lake Palma"), which was sold in July 2014, and losses from our Dart Holding Company Ltd. ("Dart") joint venture.

Six Months Results

The Company reported net income of $11.3 million, or $0.55 per diluted share, for the six months ended June 30, 2015 ("current six months") on operating revenues of $138.2 million compared to net income for the six months ended June 30, 2014 ("prior six months") of $9.7 million, or $0.48 per diluted share, on operating revenues of $166.0 million. In addition to the gains on asset dispositions and special items noted below, the current six months also included $2.4 million of foreign currency losses primarily due to the strengthening of the U.S. dollar resulting in losses on our euro denominated cash balances.

EBITDA was $47.8 million in the current six months compared to $44.8 million in the prior six months. EBITDA adjusted to exclude gains on asset dispositions and special items was $31.5 million in the current six months compared to $41.3 million in the prior six months. Special items in the current six months consisted of the $12.9 million pre-tax gain on the sale of our FBO business in Alaska and a $0.3 million gain on the repurchase of a portion of our 7.750% senior unsecured notes. Special items in the prior six months consisted of a $2.5 million pre-tax impairment charge related to a probable loss of a note receivable.

Operating revenues in the current six months were $27.9 million lower than in the prior six months primarily due to lower utilization of our medium helicopters and the sale of our FBO business in Alaska. Operating expenses were $20.9 million lower primarily due to decreased repairs and maintenance expenses, fuel expenses and personnel costs. Administrative and general expenses were $0.9 million lower primarily due to reduced headcount in the current six months and accelerated stock amortization expense related to changes in senior management in the prior six months. Equity earnings were $1.4 million lower primarily due to the absence of earnings from Lake Palma and losses from Dart.

Sequential Quarter Results

Operating revenues in the current quarter were $3.3 million higher compared to the quarter ended March 31, 2015 ("preceding quarter") primarily due to the seasonal increase of activities in Alaska, partially offset by the sale of the FBO.

Operating expenses were $3.8 million lower compared to the preceding quarter primarily due to decreases in personnel, repairs and maintenance, parts cost of sales, and fuel expenses.

Administrative and general expenses were $1.0 million higher compared to the preceding quarter primarily due to increased professional service fees and compensation expenses.

Gains on asset dispositions were $3.6 million lower compared to the preceding quarter.

Foreign currency gains positively impacted sequential quarter results by $3.5 million, primarily due to the weakening of the U.S. dollar versus the euro in the current quarter.

EBITDA was $18.6 million higher compared to the preceding quarter. EBITDA adjusted to exclude gains or losses on asset dispositions and special items was $9.6 million higher compared to the preceding quarter. 

Net income was $11.4 million higher compared to the preceding quarter. Excluding the $12.9 million pre-tax gain on the sale of the FBO and the one-time net deferred tax expense of $1.0 million in connection with the Sicher acquisition discussed below, net income would have been $4.2 million higher compared to the preceding quarter. 

Sicher Acquisition

In April 2015, the Company acquired a 75% interest in Hauser Investments Limited which owns 100% of Sicher Helicopters SAS ("Sicher"). Sicher, headquartered in Bogota, is one of the leading helicopter operators in Colombia with a strong presence in the existing onshore oil and gas market. The purchase price included the contribution of an AW139 medium helicopter and $3.2 million in cash. In addition to a Colombian air operator certificate and a hangar facility, the acquired assets include three BO-105 light twin helicopters and one AS350 single engine helicopter. In connection with the acquisition, the transfer of the AW139 helicopter was treated as a sale for U.S. income tax purposes. Accordingly, the Company recognized a one-time income tax expense of $1.0 million, which has been recorded as a deferred tax liability as the Company plans to qualify the sale for like-kind exchange treatment under the Internal Revenue Code.

FBO Sale

On May 1, 2015, the Company sold its FBO business at Ted Stevens Anchorage International Airport to Piedmont Hawthorne Aviation, LLC. Pursuant to the agreement, Piedmont Hawthorne Aviation, LLC acquired 100% of Era Group's wholly-owned subsidiary, Era FBO LLC, for cash proceeds of $14.3 million.

Houma Super Base Grand Opening

On June 25, 2015, the Company celebrated the grand opening of its 35-acre super base in Houma, Louisiana, which is now the premier helicopter operating facility in the Gulf Coast region. Designed with safety as the top operational priority, the new Houma facility features enhanced storm protection, state-of-the-art fire suppression systems, reduced flyaway limitations and an airport infrastructure equipped to provide increased reliability of flight operations in adverse weather conditions. The implementation of automated check-in kiosks, enhanced baggage transfer capabilities, robust security screening equipment and additional customer service functions will streamline passenger processing. The new, larger passenger terminal features a variety of amenities including real-time flight status screens, big screen televisions, guest wi-fi access, comfortable seating and expanded food and beverage selections. The new, larger maintenance hangar is fully climate controlled and features advanced crane systems. Era's new super base in Houma will house more than 30 aircraft and facilitate approximately 15,000 passengers per month traveling to and from offshore oil and gas installations in the U.S. Gulf of Mexico.

Fleet Update

During the current quarter, the Company's capital expenditures were $30.8 million, which consisted primarily of deposit payments for S92 heavy helicopters and our base expansion project in Houma, Louisiana.

The excess capacity in our medium helicopter fleet remains greater than in recent periods. Excess helicopters include our helicopters other than those under customer contracts, undergoing maintenance or dedicated for charter activity. We are participating in several competitive bids to place some or all of the excess medium helicopters on contract. We have recently been awarded a number of new contracts in the U.S. Gulf of Mexico and Brazil. Some of those contracts have already begun, but most of them are not scheduled to begin until the second half of 2015 or early 2016. If we are not successful in securing sufficient new projects, our financial results will be negatively impacted. In addition, we may sell certain helicopters on an opportunistic basis consistent with our stated strategy.

Capital Commitments

The Company's unfunded capital commitments as of June 30, 2015 consisted primarily of orders for helicopters and totaled $175.0 million, of which $66.4 million is payable during 2015 with the balance payable through 2017. The Company also had $1.7 million of deposits paid on options not yet exercised. The Company may terminate $106.7 million of its total commitments (inclusive of deposits paid on options not yet exercised) without further liability other than aggregate liquidated damages of $2.5 million. 

Included in these capital commitments are agreements to purchase nine AW189 heavy helicopters, four S92 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered beginning in 2015 through 2017. The S92 helicopters are scheduled to be delivered in 2015 through 2017. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company had outstanding options to purchase up to an additional ten AW189 helicopters and four S92 helicopters. If these options are exercised, the helicopters would be scheduled for delivery beginning in 2016 through 2018.

Liquidity

As of June 30, 2015, the Company had $17.0 million in cash balances and remaining availability under its senior secured revolving credit facility of $219.1 million. The Company also had $6.8 million of escrow deposits.

Conference Call

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, August 5, 2015, to review the results for the second quarter ended June 30, 2015. The conference call can be accessed as follows:

All callers will need to reference the access code 5317676

Within the U.S.: Operator Assisted Toll-Free Dial-In Number: (888) 218-8176

Outside the U.S.: Operator Assisted International Dial-In Number: (913) 312-0979

Replay

A telephone replay will be available through August 19, 2015 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 for approximately 90 days.

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 also provides helicopters and related services to third-party helicopter operators and customers in other countries, including Brazil, Colombia, India, Norway, Spain, and the United Kingdom. Era Group's helicopters are primarily used to transport personnel to, from and between offshore installations, drilling rigs and platforms.

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 nature of, offshore oil and gas exploration, development and production activity; fluctuations in worldwide prices of and demand for oil and natural gas; the Company's reliance on a small number of customers and reduction of the Company's customer base resulting from consolidation; inherent risks in operating helicopters; the failure to maintain an acceptable safety record; the ability to successfully expand into other geographic and helicopter service markets; the impact of increased United States ("U.S.") and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities; the requirement to engage in competitive processes or expend significant resources with no guaranty of recoupment; the grounding of all or a portion of the Company's fleet for extended periods of time or indefinitely; reduction or cancellation of services for government agencies; the Company's reliance on a small number of helicopter manufacturers and suppliers; 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 its assets or result in claims of a force majeure situation; declines in the global economy and financial markets; foreign currency exchange controls and exposure, including 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; credit risk exposure; the ongoing need to replace aging helicopters; the Company's reliance on the secondary used helicopter market to dispose of older helicopters; the Company's reliance on information technology; allocation of risk between the Company and its customers; liability, legal fees and costs in connection with providing emergency response services; risks associated with the Company's debt structure; 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; adequacy of insurance coverage; 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 for the year ended December 31, 2014, 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
 June 30,
    Six Months Ended
 June 30,
 
    2015     2014     2015     2014  
Operating revenues   $ 70,738     $ 86,580     $ 138,153     $ 166,023  
Costs and expenses:                                
  Operating     39,784       54,679       83,389       104,319  
  Administrative and general     10,779       10,065       20,522       21,399  
  Depreciation     11,398       11,425       23,000       22,712  
    Total costs and expenses     61,961       76,169       126,911       148,430  
Gains (losses) on asset dispositions, net     (242 )     3,139       3,146       6,030  
Operating income     8,535       13,550       14,388       23,623  
Other income (expense):                                
  Interest income     317       143       568       288  
  Interest expense     (2,881 )     (3,840 )     (6,426 )     (7,593 )
  Gain on debt extinguishment     --       --       264       --  
  Derivative losses, net     (10 )     (11 )     (22 )     (41 )
  Note receivable impairment     --       (2,457 )     --       (2,457 )
  Foreign currency gains (losses), net     543       21       (2,417 )     (36 )
  Gain on sale of FBO     12,946       --       12,946       --  
  Other, net     (9 )     13       (9 )     13  
    Total other income (expense)     10,906       (6,131 )     4,904       (9,826 )
Income before income taxes and equity earnings     19,441       7,419       19,292       13,797  
Income tax expense     8,138       2,759       8,083       5,262  
Income before equity earnings     11,303       4,660       11,209       8,535  
Equity earnings (losses), net of tax     (198 )     536       (343 )     1,035  
Net income     11,105       5,196       10,866       9,570  
Net loss attributable to non-controlling interest in subsidiary     228       25       425       96  
Net income attributable to Era Group Inc.   $ 11,333     $ 5,221     $ 11,291     $ 9,666  
                                 
Earnings per common share, basic   $ 0.55     $ 0.26     $ 0.55     $ 0.48  
Earnings per common share, diluted   $ 0.55     $ 0.26     $ 0.55     $ 0.48  
                                 
Weighted average common shares outstanding, basic     20,273,780       20,066,060       20,235,082       20,009,808  
Weighted average common shares outstanding, diluted     20,332,657       20,134,473       20,295,498       20,080,117  
                                 
EBITDA   $ 33,205     $ 23,077     $ 47,807     $ 44,849  
Adjusted EBITDA   $ 20,259     $ 25,534     $ 34,597     $ 47,306  
Adjusted EBITDA excluding Gains   $ 20,501     $ 22,395     $ 31,451     $ 41,276  
                                 
                                 
   
ERA GROUP INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(unaudited, in thousands, except share and per share amounts)  
   
    Three Months Ended  
    Jun 30,
 2015
  Mar 31,
 2015
  Dec 31,
 2014
  Sep 30,
 2014
  Jun 30,
 2014
 
Operating revenues   $ 70,738   $ 67,415   $ 74,689   $ 90,510   $ 86,580  
Costs and expenses:                                
  Operating     39,784     43,605     45,772     54,282     54,679  
  Administrative and general     10,779     9,743     9,647     12,941     10,065  
  Depreciation     11,398     11,602     11,854     11,746     11,425  
    Total costs and expenses     61,961     64,950     67,273     78,969     76,169  
Gains (losses) on asset dispositions, net     (242 )   3,388     29     42     3,139  
Operating income     8,535     5,853     7,445     11,583     13,550  
Other income (expense):                                
  Interest income     317     251     122     130     143  
  Interest expense     (2,881 )   (3,545 )   (3,556 )   (3,629 )   (3,840 )
  Gain on debt extinguishment     --     264     --     --     --  
  Derivative gains (losses), net     (10 )   (12 )   800     (1,703 )   (11 )
  Note receivable impairment     --     --     --     --     (2,457 )
  Foreign currency gains (losses), net     543     (2,960 )   (1,856 )   (485 )   21  
  Gain on sale of FBO     12,946     --     --     --     --  
  Other, net     (9 )   --     (14 )   (3 )   13  
    Total other income (expense)     10,906     (6,002 )   (4,504 )   (5,690 )   (6,131 )
Income (loss) before income taxes and equity earnings     19,441     (149 )   2,941     5,893     7,419  
Income tax expense (benefit)     8,138     (55 )   155     2,868     2,759  
Income before equity earnings (losses)     11,303     (94 )   2,786     3,025     4,660  
Equity earnings (losses), net of tax     (198 )   (145 )   354     1,286     536  
Net income (loss)     11,105     (239 )   3,140     4,311     5,196  
Net loss (income) attributable to non-controlling interest in subsidiary     228     197     45     (45 )   25  
Net income (loss) attributable to Era Group Inc.   $ 11,333   $ (42 ) $ 3,185   $ 4,266   $ 5,221  
                                 
Earnings (loss) per common share, basic   $ 0.55   $ --   $ 0.16   $ 0.21   $ 0.26  
Earnings (loss) per common share, diluted   $ 0.55   $ --   $ 0.16   $ 0.21   $ 0.26  
                                 
Weighted average common shares outstanding, basic     20,273,780     20,195,955     20,173,583     20,098,239     20,066,060  
Weighted average common shares outstanding, diluted     20,332,657     20,195,955     20,232,025     20,163,990     20,134,474  
                                 
EBITDA   $ 33,205   $ 14,602   $ 18,583   $ 22,424   $ 23,077  
Adjusted EBITDA   $ 20,259   $ 14,338   $ 18,583   $ 24,886   $ 25,534  
Adjusted EBITDA excluding Gains   $ 20,501   $ 10,950   $ 18,554   $ 24,844   $ 22,395  
                                 
                                 
   
ERA GROUP INC.  
OPERATING REVENUES BY LINE OF SERVICE  
(unaudited, in thousands)  
   
    Three Months Ended  
    Jun 30,
 2015
    Mar 31,
 2015
    Dec 31,
 2014
    Sep 30,
 2014
    Jun 30,
 2014
 
Oil and gas:(1)                                        
  U.S. Gulf of Mexico   $ 41,821     $ 41,913     $ 45,837     $ 52,870     $ 51,715  
  Alaska     6,009       3,801       6,496       7,984       9,305  
  International     47       --       183       1,514       173  
    Total oil and gas     47,877       45,714       52,516       62,368       61,193  
Dry-leasing     12,233       11,956       11,911       12,392       11,466  
Search and rescue     4,989       5,238       5,650       5,666       5,095  
Air medical services     1,914       2,367       2,301       2,569       3,137  
Flightseeing     3,118       --       --       4,043       2,946  
Fixed base operations     614       2,146       2,403       3,562       2,858  
Eliminations     (7 )     (6 )     (92 )     (90 )     (115 )
    $ 70,738     $ 67,415     $ 74,689     $ 90,510     $ 86,580  
                                         
                                         
 
FLIGHT HOURS BY LINE OF SERVICE(2)
(unaudited)
 
    Three Months Ended
    Jun 30,
 2015
  Mar 31,
 2015
  Dec 31,
 2014
  Sep 30,
 2014
  Jun 30,
 2014
Oil and gas:(1)                    
  U.S. Gulf of Mexico   8,717   7,612   8,514   10,594   11,065
  Alaska   607   290   560   939   1,122
  International   14   --   --   --   --
    Total oil and gas   9,338   7,902   9,074   11,533   12,187
Search and rescue   260   300   355   348   258
Air medical services   826   825   831   1,239   1,100
Flightseeing   1,118   --   --   1,505   1,080
    11,542   9,027   10,260   14,625   14,625
                     
(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  
(in thousands)  
   
    Jun 30,
 2015
    Mar 31,
 2015
    Dec 31,
 2014
    Sep 30,
 2014
    Jun 30,
 2014
 
ASSETS   (unaudited)    (unaudited)        (unaudited)    (unaudited) 
Current assets:                                        
  Cash and cash equivalents   $ 17,002     $ 33,691     $ 40,867     $ 40,357     $ 14,940  
  Receivables:                                        
    Trade, net of allowance for doubtful accounts     39,866       38,949       33,390       48,307       52,582  
    Other     2,110       2,567       2,062       1,679       2,078  
  Inventories, net     25,808       26,189       26,869       27,039       26,863  
  Prepaid expenses and other     3,847       4,081       2,661       1,712       2,991  
  Deferred income taxes     2,507       2,167       1,996       2,065       1,991  
  Escrow deposits     6,762       2,800       --       --       --  
    Total current assets     97,902       110,444       107,845       121,159       101,445  
Property and equipment     1,192,445       1,171,548       1,171,267       1,128,510       1,116,678  
    Accumulated depreciation     (314,484 )     (315,399 )     (308,141 )     (296,294 )     (284,547 )
    Net property and equipment     877,961       856,149       863,126       832,216       832,131  
Equity investments and advances     30,945       31,397       31,753       31,641       36,053  
Goodwill     1,823       352       352       352       352  
Intangible assets     1,410       --       --       --       --  
Other assets     14,547       15,156       14,098       14,794       15,868  
Total assets   $ 1,024,588     $ 1,013,498     $ 1,017,174     $ 1,000,162     $ 985,849  
                                         
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                        
  Accounts payable and accrued expenses   $ 12,026     $ 13,904     $ 15,120     $ 21,819     $ 23,129  
  Accrued wages and benefits     7,293       6,822       7,521       9,651       9,791  
  Accrued interest     813       4,791       949       4,805       950  
  Accrued income taxes     7,613       37       267       1,029       236  
  Derivative instruments     192       275       1,109       1,991       569  
  Current portion of long-term debt     26,130       26,729       27,426       2,787       2,787  
  Other current liabilities     3,556       3,121       3,162       4,154       4,258  
    Total current liabilities     57,623       55,679       55,554       46,236       41,720  
Long-term debt     267,671       277,424       282,118       277,390       278,023  
Deferred income taxes     218,802       217,200       217,027       216,985       214,117  
Deferred gains and other liabilities     1,994       1,937       2,111       2,898       3,120  
    Total liabilities     546,090       552,240       556,810       543,509       536,980  
                                         
Redeemable noncontrolling interest     5,195       --       --       --       --  
Equity:                                        
  Era Group Inc. stockholders' equity:                                        
    Common stock     206       206       204       204       204  
    Additional paid-in capital     431,233       430,251       429,109       428,530       425,010  
    Retained earnings     43,088       31,755       31,797       28,612       24,346  
    Treasury shares, at cost     (563 )     (560 )     (551 )     (547 )     (547 )
    Accumulated other comprehensive income (loss), net of tax     (44 )     93       95       99       146  
  Total Era Group Inc. stockholders' equity     473,920       461,745       460,654       456,898       449,159  
  Non-controlling interest     (617 )     (487 )     (290 )     (245 )     (290 )
    Total equity     473,303       461,258       460,364       456,653       448,869  
Total liabilities, redeemable noncontrolling interest and stockholders' equity   $ 1,024,588     $ 1,013,498     $ 1,017,174     $ 1,000,162     $ 985,849  
                                         

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,
 2015
  Mar 31,
 2015
  Dec 31,
 2014
  Sep 30,
 2014
  Jun 30,
 2014
  Jun 30,
 2015
  Jun 30,
 2014
 
Net Income $ 11,105   $ (239 ) $ 3,140   $ 4,311   $ 5,196   $ 10,866   $ 9,570  
  Depreciation   11,398     11,602     11,854     11,746     11,425     23,000     22,712  
  Interest income   (317 )   (251 )   (122 )   (130 )   (143 )   (568 )   (288 )
  Interest expense   2,881     3,545     3,556     3,629     3,840     6,426     7,593  
  Income tax expense (benefit)   8,138     (55 )   155     2,868     2,759     8,083     5,262  
EBITDA $ 33,205   $ 14,602   $ 18,583   $ 22,424   $ 23,077   $ 47,807   $ 44,849  
  Special items (1)   (12,946 )   (264 )   --     2,462     2,457     (13,210 )   2,457  
Adjusted EBITDA $ 20,259   $ 14,338   $ 18,583   $ 24,886   $ 25,534   $ 34,597   $ 47,306  
  Losses (gains) on asset dispositions, net ("Gains")   242     (3,388 )   (29 )   (42 )   (3,139 )   (3,146 )   (6,030 )
Adjusted EBITDA excluding Gains $ 20,501   $ 10,950   $ 18,554   $ 24,844   $ 22,395   $ 31,451   $ 41,276  
                                           

(1) Special items include the following:

  • In the three months ended June 30, 2015, a pre-tax gain of $12.9 million on the sale of our FBO in Alaska. 
  • In the three months ended March 31, 2015, a pre-tax gain on the extinguishment of debt of $0.3 million related to the repurchase of a portion of our 7.750% Senior Notes; 
  • In the three months ended September 30, 2014, a pre-tax charge of $2.5 million for severance-related expenses for the
  • Company's former CEO; and In the three and six months ended June 30, 2014, a pre-tax impairment charge of $2.5 million on a note receivable from a foreign company with whom we participated in bids for contracts.
 
 
ERA GROUP INC.
FLEET COUNTS(1)
(unaudited)
 
    Jun 30,
 2015
  Mar 31,
 2015
  Dec 31,
 2014
  Sep 30,
 2014
  Jun 30,
 2014
Heavy:                    
  H225   9   9   9   9   9
                     
Medium:                    
  AW139   39   39   39   39   38
  B212   8   8   9   9   9
  B412   3   3   6   6   6
  S76 A++   2   2   2   2   2
  S76 C+/C++   6   6   6   6   6
    58   58   62   62   61
                     
Light--twin engine:                    
  A109   7   7   9   9   9
  BK-117   3   3   3   3   3
  BO-105   3   --   --   --   --
  H135   19   19   20   20   20
  H145   5   5   5   5   5
    37   34   37   37   37
                     
Light--single engine:                    
  A119(2)   17   17   17   17   24
  AS350   31   35   35   35   35
    48   52   52   52   59
Total Helicopters   152   153   160   160   166
                     
(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.
(2) Effective July 24, 2014, we sold our 51% interest in Lake Palma, which owned seven of the A119 helicopters listed above as of June 30, 2014.
   

Contact Information

  • For additional information concerning Era Group, contact
    Benjamin Slusarchuk
    (713) 369-4630
    or visit Era Group's website at www.eragroupinc.com