Erickson Air-Crane Announces First Quarter 2013 Results

Erickson Air-Crane Announces First Quarter 2013 Results

-- Revenues Increase 34% Versus Prior Year to Record Q1 Revenues on Brisk Australian Fire Season, Growing Oil and Gas Initiative --

-- Reports EPS of $0.01, Excluding $0.14 of Acquisition-Related Expenses --

-- Updates FY13 Guidance to Include Accretive EHI Acquisition --

PORTLAND, Ore.--(BUSINESS WIRE)-- Erickson Air-Crane Incorporated (NAS: EAC) ("Erickson" or "the Company"), a leading global provider of aviation services to a diverse mix of commercial and government customers and the vertically integrated manufacturer and operator of the powerful, heavy-lift helicopter, the Erickson S-64 Aircrane, today announced first quarter 2013 financial results, including record first quarter revenues.

First Quarter Highlights

• Revenue increased 33.8% to $36.9 million, the highest in our history

• Flight hours increased 38.0% to 2,160 hours

• Operating Income was $1.9 million, excluding $2.3 million of acquisition-related expenses

• Adjusted EBITDA increased $5.3 million to $7.0 million

First Quarter Results

Revenue for the quarter ended March 31, 2013 increased by 33.8% compared with the prior year period, rising to $36.9 million. Revenue growth in aerial services was broad-based, driven by a very active fire season in Australia, continued strong growth in the Company's infrastructure construction business, in particular in the oil and gas sector, and an active quarter for timber harvesting.

The Company reported adjusted first quarter net income attributable to Erickson Air-Crane Incorporated of $0.1 million, or $0.01 adjusted net income per basic and diluted share (a non-GAAP measure described below), compared with a prior year net loss of $2.5 million. Erickson incurred acquisition-related expenses in the first quarter of $2.3 million, or $0.14 of after-tax impact to diluted earnings per share, resulting in a first quarter loss attributable to Erickson Air-Crane of $1.2 million, or $0.13 net loss per basic and diluted share.

Acquisition-related expenses were attributable to both the acquisition of Evergreen Helicopters, Inc. ("EHI"), which was completed on May 2, 2013, as well as the Company's pending transaction to acquire the Air Amazonia fleet and operations from HRT Oil & Gas. The Company continues to anticipate closing the Air Amazonia transaction in the second quarter. Excluding these acquisition-related expenses, the Company was pleased to achieve a profitable quarter, as adjusted, in its historically weakest quarter.

Udo Rieder, President and Chief Executive Officer of Erickson Air-Crane, commented, "This was a strong start to 2013. Performance by our Aircrane operations and our completion of the EHI transaction position us to quickly transform our business. We believe the execution of our strategic acquisition program is enabling us to emerge as a highly diversified, global company with a wide array of opportunities to generate high-margin growth. We expect to demonstrate our ability to drive value to the full range of our constituents, including customers, partners, and shareholders."

The Company's first quarter operating income was $1.9 million, excluding the above-mentioned $2.3 million of acquisition-related expenses, compared with the prior year's first quarter loss of $1.7 million. Including the acquisition-related expenses, the first quarter operating loss was $0.3 million. First quarter Adjusted EBITDA (a non-GAAP measure described below) was $7.0 million for the three months ended March 31, 2013, an increase of $5.3 million as compared to the prior year period's comparable level of $1.7 million. This increase was driven by revenue growth, a gross margin improvement of 10.5 percentage points and, excluding acquisition-related expenses, an improvement to operating expenses as a percentage of sales of 0.7 percentage points.

Rieder continued, "We are seeing significant scale-related benefits accompany the growth in our Aircrane business. This includes our deployment of a second Aircrane dedicated to our South American oil and gas initiative, an ongoing focus for both organic and acquisition-related expansion. In concert with increased leverage over our fixed corporate infrastructure and the enhanced profitability that accompanied a very active Australian fire season, we drove a strong overall operating performance in the first quarter."

Updated Guidance

Erickson today provided fiscal year 2013 guidance for revenues and Adjusted EBITDA. This guidance reflects a reiteration of the Company's previously communicated expectations for its base business and the inclusion of expected results for the acquired EHI business.

The full year guidance provided below is operational and adjusted and therefore does not include any acquisition-related expenses (including the $2.3 million incurred in the first quarter), purchase accounting adjustments, restructuring expenses, or other similar items. The Company noted that its guidance also does not yet include any effect from the planned but still pending acquisition of Air Amazonia from HRT. The guidance below does incorporate a preliminary estimate of synergies expected to be realized this year.

The Company now expects to report full year fiscal 2013 revenues in the range of $325 to $335 million, and it expects Adjusted EBITDA for the full year in the range of $93 to $101 million. On a pro forma basis, as if the acquisition and associated financing had occurred on January 1, 2013, the Company expects full year revenues in the range of $385 to $395 million and Adjusted EBITDA for the full year in the range of $108 to $116 million.

Rieder concluded, "We are deeply grateful for the clear vote of confidence provided to us in recent quarters by the capital markets. We have utilized that support to rapidly implement our strategy and to create what we believe will be enduring value. We are certainly pleased to have opened a new chapter in Erickson's story with what we believe will be a highly accretive transaction. We believe the new Erickson will leverage our exceptional talent and deep operational efficiencies to better serve our customers and create long-term value for all our stakeholders."

Conference Call

The Company noted that it will hold a conference call to discuss its earnings results for the first quarter ended March 31, 2013 on May 9 at 4:30 p.m. Eastern Time with prepared remarks by Udo Rieder, the Company's President and Chief Executive Officer, and Chuck Ryan, the Company's Chief Financial Officer, to be followed by a question and answer session for the investment community. A live webcast of the call can be accessed at investors.ericksonaircrane.com. To access the call, dial toll-free 1-888-438-5519 or 1-719-325-2428 (international). The pass code is 3039751.

To listen to a telephonic replay of the conference call, dial toll-free 1-877-870-5176 or 1-858-384-5517 (international) and enter pass code 3039751. The replay will be available beginning at 7:30 p.m. ET on Thursday, May 9, 2013 and will last through 11:59 p.m. ET May 23, 2013.