Era Group Inc. Announces First Quarter 2013 Results

HOUSTON, TX -- (Marketwired) -- 05/14/13 -- Era Group Inc. (NYSE: ERA) today announced its results for the quarter ended March 31, 2013. On January 31, 2013, the shares of Era Group Inc., then a wholly-owned subsidiary of SEACOR Holdings Inc. ("SEACOR"), were distributed on a pro-rata basis to the shareholders of SEACOR (the "Spin-off"). As a result, Era Group Inc. became an independent public company with its common stock listed on the New York Stock Exchange under the symbol "ERA".

The Company today reported net income attributable to Era Group Inc. for the quarter ended March 31, 2013 of $6.7 million on operating revenues of $67.7 million compared to a net loss attributable to Era Group Inc. of $4.6 million on operating revenues of $61.1 million in the prior year period. In addition to the increase in operating revenues in the current quarter and the larger contribution from gains on asset dispositions discussed below, the improvement in net income was also impacted by the recognition in the prior year period of a $5.9 million impairment charge, net of tax, on the Company's investment in its Brazilian joint venture. A comparison of results for the quarter ended March 31, 2013 with the quarter ended March 31, 2012 is included in the "Highlights for the Quarter" discussion below.

Highlights for the Quarter

Operating income for the current quarter was $14.6 million compared to operating income of $3.8 million in the prior year period. Earnings before interest, taxes, depreciation and amortization, adjusted to exclude SEACOR management fees and certain other items ("Adjusted EBITDA"), was $26.6 million for the quarter ended March 31, 2013 compared to $16.3 million for the prior year period. First quarter results for the current year included $10.8 million in gains on asset dispositions compared with $1.8 million in gains in the first quarter of 2012.

The $6.7 million increase in operating revenues as compared with the prior year period relates to a $10.9 million increase in operating revenues from oil and gas activities primarily due to newly delivered medium helicopters being placed in service and the associated increase in flight hours; a new international contract that commenced in January 2013; and an increase in activity in Alaska, namely short-term work associated with a drillship running aground and the resumption of services with a major customer. This improvement was partially offset by a $1.1 million reduction in operating revenues from contract-leasing, primarily due to the deferral of revenue resulting from the financial difficulties experienced by two of our customers, and a $3.2 million reduction in operating revenues from air medical services due to the conclusion of two long-term hospital contracts in the second and fourth quarters of 2012.

Operating expenses were $3.4 million higher as compared to the prior year period primarily due to an increase in personnel and fuel costs, consistent with the increase in activity, and an increase in repairs and maintenance costs, primarily due to vendor credits recognized in the prior year period.

Administrative and general expenses were $0.5 million lower, primarily due to legal and professional expenses associated with a contemplated initial public offering of our common stock recognized in the prior year period. This decrease was partially offset by the recognition of bonus awards for executive management and severance costs associated with changes in senior management in the first quarter of 2013. Depreciation expense was $11.7 million in the first quarter of 2013, an increase of $2.0 million compared to the prior year period, primarily due to fleet additions.

Gains on asset dispositions, net were $10.8 million in the first quarter of 2013. These amounts included: a gain of $5.4 million on the sale of an EC225 helicopter that was damaged in an incident in May 2012 while under contract-lease to a customer and subsequently sold to that customer; a gain of $1.2 million on the recognition of insurance proceeds of $2.1 million related to a Sikorsky S76A helicopter involved in an incident in the current period; gains of $4.1 million on the sale of helicopters and other equipment in the normal course of business; and previously deferred gains of $0.1 million.

Equity in Earnings (Losses) of 50% or Less Owned Companies was $0.6 million in the first quarter of 2013, an increase of $7.0 million compared to the prior year period loss of $6.4 million, primarily due to the recognition of a loss of $0.6 million and an impairment charge of $5.9 million, net of tax, on our investment in our Brazilian joint venture in the first quarter of 2012.

Equipment Acquisitions

During the quarter ended March 31, 2013, the Company's capital expenditures were $19.4 million and consisted primarily of a helicopter acquisition and deposits on future helicopter deliveries. During the period, the Company placed two medium helicopters in service.

Capital Commitments

The Company's unfunded capital commitments as of March 31, 2013 consisted primarily of orders for helicopters and totaled $131.1 million, of which $13.4 million is payable during the remainder of 2013 with the balance payable through 2016. Of these commitments, $124.3 million may be terminated without further liability other than liquidated damages of $3.3 million in the aggregate.

Conference Call

Management will conduct a conference call starting at 10.00 a.m. ET (9.00 a.m. CT) on Wednesday, May 15, 2013, to review the results for the first quarter ended March 31, 2013. The conference call can be accessed as follows:

All callers will need to reference the access code 12974310.

Within the U.S.:

Operator Assisted Toll-Free Dial-In Number: (866) 607-0535

Outside the U.S.:

Operator Assisted International Dial-In Number: (832) 445-1827

Replay

A telephone replay will be available through May 31, 2013 and may be accessed by calling (855) 859-2056 for domestic callers or (404) 537-3406 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, Canada, India, Indonesia, Mexico, Norway, Spain, Sweden, the United Kingdom and Uruguay. Era Group's helicopters are primarily used to transport personnel to, from and between offshore installations, drilling rigs and platforms.

This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated economic 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 effect of the Spin-off, including the ability of the Company to recognize the expected benefits from the Spin-off and the Company's dependence on SEACOR's performance under various agreements; decreased demand and loss of revenues resulting from developments that may adversely impact the offshore oil and gas industry, including the issuance of new safety and environmental guidelines or regulations that could increase the costs of exploration and production, reduce the area of operations and result in permitting delays, U.S. government implemented moratoriums directing operators to cease certain drilling activities and any extension of such moratoriums that may result in unplanned customer suspensions, cancellations, rate reductions or non-renewals of aviation equipment contracts or failures to finalize commitments to contract aviation equipment; safety issues experienced by a particular helicopter model that could result in customers refusing to use that helicopter model or a regulatory body grounding that helicopter model, which could also permanently devalue that helicopter model; the cyclical nature of the oil and gas industry; increased U.S. and foreign government legislation and regulation, including environmental and aviation laws and regulations, and the Company's compliance therewith and the costs thereof; dependence on the activity in the U.S. Gulf of Mexico and Alaska and the Company's ability to expand into other markets; liability, legal fees and costs in connection with providing emergency response services, including involvement in response to the oil spill that resulted from the sinking of the Deepwater Horizon in April 2010; decreased demand for the Company's services as a result of declines in the global economy; declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations; activity in foreign countries and changes in foreign political, military and economic conditions; the failure to maintain an acceptable safety record; the dependence on small number of customers; consolidation of the Company's customer base; industry fleet capacity; restrictions imposed by the U.S. federal aviation laws and regulations on the amount of foreign ownership of the Company's common stock; operational risks; risks associated with our debt structure; effects of adverse weather conditions and seasonality; adequacy of insurance coverage; the attraction and retention of qualified personnel; 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 Era Group's businesses, particularly those mentioned under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and its other SEC filings, which are incorporated by reference.

For additional information concerning Era Group, contact Christopher Bradshaw at (281) 606-4871 or visit Era Group's website at www.eragroupinc.com.

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, interest expense and interest expense on advances from SEACOR), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for SEACOR Management Fees and certain other items that occur during the reported period. We include EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance. We also present Adjusted EBITDAR, which is defined as Adjusted EBITDA further adjusted for rent expense (included as components of operating expense and general and administrative) because we believe that research analysts and investment bankers use this metric to assess our and others in our peer group's performance. Neither EBITDA, Adjusted EBITDA nor Adjusted EBITDAR 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, Adjusted EBITDA and Adjusted EBITDAR 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, Adjusted EBITDA and Adjusted EBITDAR (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 (Loss), the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDAR.

(1) Special items include the following:

• Severance expense of $0.7 million for the three months ended September 30, 2012, due to prior changes in executive management;
  
  
• Expenses incurred in connection with our abandoned initial public offering of $2.5 million for the three months ended March 31, 2012, $0.1 million for the three months ended June 30, 2012 and $0.3 million for the three months ended September 30, 2012; and
  
  
• An impairment charge of $5.9 million, net of tax, for the three months ended March 31, 2012, on our investment in Aeróleo Taxi Aéreo S/A.
  
  

Christopher Bradshaw
(281) 606-4871
www.eragroupinc.com

Source: Era Group Inc.

Released May 14, 2013