SOURCE: Era Group Inc.

Era Group Inc.

August 02, 2016 18:02 ET

Era Group Inc. Reports Second Quarter 2016 Results

HOUSTON, TX--(Marketwired - Aug 2, 2016) - 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
 June 30,
    Six Months Ended
 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,
 2016
  Mar 31,
 2016
  Dec 31,
 2015
  Sep 30,
 2015
  Jun 30,
 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,
 2016
  Mar 31,
 2016
  Dec 31,
 2015
  Sep 30,
 2015
  Jun 30,
 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,
 2016
  Mar 31,
 2016
  Dec 31,
 2015
  Sep 30,
 2015
  Jun 30,
 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,
 2016
    Mar 31,
 2016
    Dec 31,
 2015
    Sep 30,
 2015
    Jun 30,
 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,
 2016
    Mar 31,
 2016
    Dec 31,
 2015
    Sep 30,
 2015
    Jun 30,
 2015
    Jun 30,
 2016
    Jun 30,
 2015
 
Net Income (loss)   $ (4,510 )   $ (3,950 )   $ (3,620 )   $ 653     $ 11,105     $ (8,460 )   $ 10,866  
  Depreciation and amortization     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,
 2016
  Mar 31,
 2016
  Dec 31,
 2015
  Sep 30,
 2015
  Jun 30,
 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.
     
     

Contact Information

  • For additional information concerning Era Group, contact
    Andrew Puhala
    (713) 369-4646
    or visit Era Group's website at www.eragroupinc.com