ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 72-1455213 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
945 Bunker Hill, Suite 650 | ||
Houston, Texas | 77024 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | ERA | NYSE |
Large accelerated filer ¨ | Accelerated filer ý | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth company ¨ |
Part I. | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Part II. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. |
ITEM 1. | FINANCIAL STATEMENTS |
ERA GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents (including $1,843 and $1,745 from VIEs(1) in 2019 and 2018, respectively) | $ | 107,736 | $ | 50,753 | |||
Receivables: | |||||||
Trade, operating, net of allowance for doubtful accounts of $176 and $261 in 2019 and 2018, respectively (including $6,177 and $5,565 from VIEs in 2019 and 2018, respectively) | 31,312 | 33,306 | |||||
Trade, dry-leasing | 5,864 | 3,803 | |||||
Tax receivables (including $2,705 and $3,187 from VIEs in 2019 and 2018, respectively) | 2,705 | 3,187 | |||||
Other (including $21 and $340 from VIEs in 2019 and 2018, respectively) | 11,567 | 2,343 | |||||
Inventories, net (including $42 and $40 from VIEs in 2019 and 2018, respectively) | 20,826 | 20,673 | |||||
Prepaid expenses (including $72 and $10 from VIEs in 2019 and 2018, respectively) | 2,851 | 1,807 | |||||
Total current assets | 182,861 | 115,872 | |||||
Property and equipment (including $1,468 and $1,375 from VIEs in 2019 and 2018, respectively) | 901,580 | 917,161 | |||||
Accumulated depreciation (including $584 and $485 from VIEs in 2019 and 2018, respectively) | (334,730 | ) | (317,967 | ) | |||
Property and equipment, net | 566,850 | 599,194 | |||||
Operating lease right-of-use (including $1,812 from VIEs in 2019) | 9,907 | — | |||||
Equity investments and advances | — | 27,112 | |||||
Intangible assets | 1,094 | 1,107 | |||||
Other assets (including $403 and $96 from VIEs in 2019 and 2018, respectively) | 6,363 | 21,578 | |||||
Total assets | $ | 767,075 | $ | 764,863 | |||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses (including $1,433 and $1,522 from VIEs in 2019 and 2018, respectively) | $ | 11,940 | $ | 13,161 | |||
Accrued wages and benefits (including $1,654 and $1,429 from VIEs in 2019 and 2018, respectively) | 8,960 | 9,267 | |||||
Accrued interest | 3,321 | 569 | |||||
Accrued income taxes | 2,945 | 973 | |||||
Accrued other taxes (including $270 and $500 from VIEs in 2019 and 2018, respectively) | 1,986 | 1,268 | |||||
Accrued contingencies (including $548 and $630 from VIEs in 2019 and 2018, respectively) | 548 | 630 | |||||
Current portion of long-term debt (including $182 and $395 from VIEs in 2019 and 2018, respectively) | 1,845 | 2,058 | |||||
Other current liabilities (including $378 and $0 from VIEs in 2019 and 2018, respectively) | 2,851 | 878 | |||||
Total current liabilities | 34,396 | 28,804 | |||||
Long-term debt | 158,731 | 160,217 | |||||
Deferred income taxes | 105,440 | 108,357 | |||||
Operating lease liabilities (including $1,434 from VIEs in 2019) | 8,166 | — | |||||
Other liabilities | 850 | 747 | |||||
Total liabilities | 307,583 | 298,125 | |||||
Commitments and contingencies (see Note 8) | |||||||
Redeemable noncontrolling interest | 2,945 | 3,302 | |||||
Equity: | |||||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,288,619 and 21,765,404 outstanding in 2019 and 2018, respectively, exclusive of treasury shares | 224 | 219 | |||||
Additional paid-in capital | 451,103 | 447,298 | |||||
Retained earnings | 15,372 | 18,285 | |||||
Treasury shares, at cost; 1,149,820 and 156,737 shares in 2019 and 2018, respectively | (10,152 | ) | (2,476 | ) | |||
Accumulated other comprehensive income, net of tax | — | 110 | |||||
Total equity | 456,547 | 463,436 | |||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 767,075 | $ | 764,863 |
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Operating revenues | $ | 54,659 | $ | 51,894 | $ | 153,569 | $ | 161,116 | |||||||
Dry-leasing revenues | 4,250 | 2,716 | 12,113 | 8,544 | |||||||||||
Total revenues | 58,909 | 54,610 | 165,682 | 169,660 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating | 39,522 | 36,513 | 115,038 | 114,505 | |||||||||||
Administrative and general | 9,142 | 8,837 | 26,912 | 35,714 | |||||||||||
Depreciation and amortization | 9,312 | 9,541 | 28,282 | 30,011 | |||||||||||
Total costs and expenses | 57,976 | 54,891 | 170,232 | 180,230 | |||||||||||
Gains (losses) on asset dispositions, net | 754 | (148 | ) | 562 | 2,269 | ||||||||||
Litigation settlement proceeds | — | 42,000 | — | 42,000 | |||||||||||
Operating income (loss) | 1,687 | 41,571 | (3,988 | ) | 33,699 | ||||||||||
Other income (expense): | |||||||||||||||
Interest income | 956 | 732 | 2,642 | 1,224 | |||||||||||
Interest expense | (3,464 | ) | (3,549 | ) | (10,357 | ) | (11,646 | ) | |||||||
Loss on sale of investments | — | — | (569 | ) | — | ||||||||||
Foreign currency losses, net | (718 | ) | (94 | ) | (574 | ) | (1,095 | ) | |||||||
Gains (losses) on debt extinguishment | — | — | (13 | ) | 175 | ||||||||||
Other, net | (5 | ) | 15 | (25 | ) | 21 | |||||||||
Total other income (expense) | (3,231 | ) | (2,896 | ) | (8,896 | ) | (11,321 | ) | |||||||
Income (loss) before income taxes and equity earnings | (1,544 | ) | 38,675 | (12,884 | ) | 22,378 | |||||||||
Income tax expense | 515 | 7,861 | 321 | 4,549 | |||||||||||
Income (loss) before equity earnings | (2,059 | ) | 30,814 | (13,205 | ) | 17,829 | |||||||||
Equity earnings, net of tax | — | 465 | 9,935 | 1,577 | |||||||||||
Net income (loss) | (2,059 | ) | 31,279 | (3,270 | ) | 19,406 | |||||||||
Net loss attributable to noncontrolling interest in subsidiary | 149 | 10 | 357 | 310 | |||||||||||
Net income (loss) attributable to Era Group Inc. | $ | (1,910 | ) | $ | 31,289 | $ | (2,913 | ) | $ | 19,716 | |||||
Income (loss) per common share, basic and diluted | $ | (0.09 | ) | $ | 1.44 | $ | (0.14 | ) | $ | 0.91 | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 20,625,408 | 21,215,576 | 21,129,722 | 21,139,212 | |||||||||||
Diluted | 20,629,328 | 21,239,189 | 21,131,029 | 21,156,466 |
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited, in thousands) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income (loss) | $ | (2,059 | ) | $ | 31,279 | $ | (3,270 | ) | $ | 19,406 | ||||||
Other comprehensive loss: | ||||||||||||||||
Foreign currency translation adjustments, net | — | — | (110 | ) | (5 | ) | ||||||||||
Total other comprehensive loss | — | — | (110 | ) | (5 | ) | ||||||||||
Comprehensive income (loss) | (2,059 | ) | 31,279 | (3,380 | ) | 19,401 | ||||||||||
Comprehensive loss attributable to noncontrolling interest in subsidiary | 149 | 10 | 357 | 310 | ||||||||||||
Comprehensive income (loss) attributable to Era Group Inc. | $ | (1,910 | ) | $ | 31,289 | $ | (3,023 | ) | $ | 19,711 |
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND EQUITY (unaudited, in thousands) | |||||||||||||||||||||||||||||
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Era Group Inc. Stockholders’ Equity | |||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income | Total Equity | |||||||||||||||||||||||
June 30, 2019 | $ | 3,094 | $ | 224 | $ | 449,687 | $ | 17,282 | $ | (8,531 | ) | $ | — | $ | 458,662 | ||||||||||||||
Issuance of common stock: | |||||||||||||||||||||||||||||
Employee Stock Purchase Plan | — | — | 487 | — | — | — | 487 | ||||||||||||||||||||||
Share award amortization | — | — | 929 | — | — | — | 929 | ||||||||||||||||||||||
Purchase of treasury shares | — | — | — | — | (1,621 | ) | — | (1,621 | ) | ||||||||||||||||||||
Net loss | — | — | — | (2,059 | ) | — | — | (2,059 | ) | ||||||||||||||||||||
Net loss attributable to redeemable noncontrolling interest | (149 | ) | — | — | 149 | — | — | 149 | |||||||||||||||||||||
September 30, 2019 | $ | 2,945 | $ | 224 | $ | 451,103 | $ | 15,372 | $ | (10,152 | ) | $ | — | $ | 456,547 |
Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
Era Group Inc. Stockholders’ Equity | |||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income | Total Equity | |||||||||||||||||||||||
June 30, 2018 | $ | 3,466 | $ | 219 | $ | 445,885 | $ | (7,210 | ) | $ | (2,951 | ) | $ | 105 | $ | 436,048 | |||||||||||||
Issuance of common stock: | |||||||||||||||||||||||||||||
Employee Stock Purchase Plan | — | — | 409 | — | — | — | 409 | ||||||||||||||||||||||
Share award amortization | — | — | 719 | — | — | — | 719 | ||||||||||||||||||||||
Net income | — | — | — | 31,279 | — | — | 31,279 | ||||||||||||||||||||||
Net loss attributable to redeemable noncontrolling interest | (10 | ) | — | — | 10 | — | — | 10 | |||||||||||||||||||||
Currency translation adjustments, net of tax | — | — | — | — | — | 5 | 5 | ||||||||||||||||||||||
September 30, 2018 | $ | 3,456 | $ | 219 | $ | 447,013 | $ | 24,079 | $ | (2,951 | ) | $ | 110 | $ | 468,470 |
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Era Group Inc. Stockholders’ Equity | |||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income | Total Equity | |||||||||||||||||||||||
December 31, 2018 | $ | 3,302 | $ | 219 | $ | 447,298 | $ | 18,285 | $ | (2,476 | ) | $ | 110 | $ | 463,436 | ||||||||||||||
Issuance of common stock: | |||||||||||||||||||||||||||||
Restricted stock grants | — | 4 | (4 | ) | — | — | — | — | |||||||||||||||||||||
Employee Stock Purchase Plan | — | 1 | 1,076 | — | — | — | 1,077 | ||||||||||||||||||||||
Share award amortization | — | — | 2,733 | — | — | — | 2,733 | ||||||||||||||||||||||
Purchase of treasury shares | — | — | — | — | (7,676 | ) | — | (7,676 | ) | ||||||||||||||||||||
Net loss | — | — | — | (3,270 | ) | — | — | (3,270 | ) | ||||||||||||||||||||
Net loss attributable to redeemable noncontrolling interest | (357 | ) | — | — | 357 | — | — | 357 | |||||||||||||||||||||
Currency translation adjustments, net of tax | — | — | — | — | — | (110 | ) | (110 | ) | ||||||||||||||||||||
September 30, 2019 | $ | 2,945 | $ | 224 | $ | 451,103 | $ | 15,372 | $ | (10,152 | ) | $ | — | $ | 456,547 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
Era Group Inc. Stockholders’ Equity | |||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income | Total Equity | |||||||||||||||||||||||
December 31, 2017 | $ | 3,766 | $ | 215 | $ | 443,944 | $ | 4,363 | $ | (2,951 | ) | $ | 110 | $ | 445,681 | ||||||||||||||
Issuance of common stock: | |||||||||||||||||||||||||||||
Restricted stock grants | — | 3 | (3 | ) | — | — | — | — | |||||||||||||||||||||
Employee Stock Purchase Plan | — | 1 | 892 | — | — | — | 893 | ||||||||||||||||||||||
Share award amortization | — | — | 2,180 | — | — | — | 2,180 | ||||||||||||||||||||||
Net income | — | — | — | 19,406 | — | — | 19,406 | ||||||||||||||||||||||
Net loss attributable to redeemable noncontrolling interest | (310 | ) | — | — | 310 | — | — | 310 | |||||||||||||||||||||
September 30, 2018 | $ | 3,456 | $ | 219 | $ | 447,013 | $ | 24,079 | $ | (2,951 | ) | $ | 110 | $ | 468,470 |
ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (3,270 | ) | $ | 19,406 | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 28,282 | 30,011 | |||||
Share-based compensation | 2,733 | 2,180 | |||||
Bad debt expense, net | 41 | — | |||||
Interest income | (227 | ) | (614 | ) | |||
Non-cash penalty and interest expenses | — | 607 | |||||
Gains on asset dispositions, net | (562 | ) | (2,269 | ) | |||
Debt discount amortization | 203 | 188 | |||||
Amortization of deferred financing costs | 722 | 1,173 | |||||
Loss on sale of investments | 569 | — | |||||
Foreign currency losses, net | 592 | 1,097 | |||||
Losses (gains) on debt extinguishment, net | 13 | (175 | ) | ||||
Deferred income tax (benefit) expense | (2,887 | ) | 1,541 | ||||
Equity earnings, net of tax | (9,935 | ) | (1,577 | ) | |||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in receivables | 176 | (2,390 | ) | ||||
(Increase) decrease in prepaid expenses and other assets | (726 | ) | 393 | ||||
Increase in accounts payable, accrued expenses and other liabilities | 4,121 | 781 | |||||
Net cash provided by operating activities | 19,845 | 50,352 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (5,168 | ) | (7,686 | ) | |||
Proceeds from disposition of property and equipment | 9,252 | 29,520 | |||||
Purchase of investments | (5,000 | ) | — | ||||
Proceeds from sale of investments | 4,430 | — | |||||
Dividends received from equity investees | — | 1,000 | |||||
Proceeds from sale of equity investees, net | 34,712 | — | |||||
Principal payments on notes due from equity investees | 2,334 | 401 | |||||
Principal payments on third party notes receivable | 5,340 | 620 | |||||
Net cash provided by investing activities | 45,900 | 23,855 | |||||
Cash flows from financing activities: | |||||||
Long-term debt issuance costs | — | (1,295 | ) | ||||
Payments on long-term debt | (1,458 | ) | (42,562 | ) | |||
Extinguishment of long-term debt | (740 | ) | — | ||||
Proceeds from share award plans | 1,077 | 893 | |||||
Purchase of treasury shares | (7,676 | ) | — | ||||
Net cash used in financing activities | (8,797 | ) | (42,964 | ) | |||
Effects of exchange rate changes on cash and cash equivalents | 35 | (445 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 56,983 | 30,798 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 50,753 | 16,833 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 107,736 | $ | 47,631 | |||
Supplemental cash flow information: | |||||||
Cash paid for interest | $ | 6,690 | $ | 7,867 | |||
Interest capitalized during the period | — | 97 | |||||
Interest, net of amounts capitalized | $ | 6,690 | $ | 7,770 | |||
Cash paid for income taxes | $ | 1,255 | 63 |
1. | BASIS OF PRESENTATION AND ACCOUNTING POLICY |
September 30, 2019 | December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||||
Cash and cash equivalents | $ | 107,736 | $ | 50,753 | $ | 47,631 | $ | 13,583 | |||||||
Restricted cash (1) | — | — | — | 3,250 | |||||||||||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows | $ | 107,736 | $ | 50,753 | $ | 47,631 | $ | 16,833 |
2. | FAIR VALUE MEASUREMENTS |
Carrying Amount | Level 1 | Level 2 | Level 3 | ||||||||||||
September 30, 2019 | |||||||||||||||
LIABILITIES | |||||||||||||||
Long-term debt, including current portion | $ | 160,576 | $ | — | $ | 168,920 | $ | — | |||||||
December 31, 2018 | |||||||||||||||
LIABILITIES | |||||||||||||||
Long-term debt, including current portion | $ | 162,275 | $ | — | $ | 159,367 | $ | — |
3. | ACQUISITIONS AND DISPOSITIONS |
4. | LEASES |
Minimum Payments | ||||
2019 | $ | 1,573 | ||
2020 | 1,530 | |||
2021 | 987 | |||
2022 | 562 | |||
2023 | 495 | |||
Years subsequent to 2023 | 7,952 | |||
Total future minimum lease payments | $ | 13,099 |
Minimum Payments | ||||
2019 | $ | 547 | ||
2020 | 2,369 | |||
2021 | 1,758 | |||
2022 | 1,334 | |||
2023 | 1,298 | |||
Years subsequent to 2023 | 9,358 | |||
Total future minimum lease payments | 16,664 | |||
Less: imputed interest | 6,676 | |||
Present value of lease liabilities | $ | 9,988 |
Reported balances: | ||||
Other current liabilities | $ | 1,822 | ||
Long-term lease liabilities | 8,166 | |||
Total operating lease liabilities | $ | 9,988 |
Weighted average remaining lease term | 15 years | ||
Weighted average discount rate | 6.09 | % | |
Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2019 (in thousands) | $ 1,570 |
5. | VARIABLE INTEREST ENTITIES |
6. | INCOME TAXES |
7. | LONG-TERM DEBT |
September 30, 2019 | December 31, 2018 | |||||||
7.750% Senior Notes (excluding unamortized discount) | $ | 144,088 | $ | 144,828 | ||||
Senior secured revolving credit facility | — | — | ||||||
Promissory notes | 18,732 | 19,980 | ||||||
Other | 182 | 395 | ||||||
Total principal balance on borrowings | 163,002 | 165,203 | ||||||
Portion due within one year | (1,845 | ) | (2,058 | ) | ||||
Unamortized debt issuance costs | (1,419 | ) | (1,712 | ) | ||||
Unamortized discount, net | (1,007 | ) | (1,216 | ) | ||||
Long-term debt | $ | 158,731 | $ | 160,217 |
8. | COMMITMENTS AND CONTINGENCIES |
9. | EARNINGS (LOSS) PER COMMON SHARE |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | (1,910 | ) | $ | 31,289 | $ | (2,913 | ) | $ | 19,716 | ||||||
Less: Net income attributable to participating securities | — | 714 | — | 425 | ||||||||||||
Net income (loss) attributable to fully vested common stock | $ | (1,910 | ) | $ | 30,575 | $ | (2,913 | ) | $ | 19,291 | ||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 20,625,408 | 21,215,576 | 21,129,722 | 21,139,212 | ||||||||||||
Diluted(1) | 20,629,328 | 21,239,189 | 21,131,029 | 21,156,466 | ||||||||||||
Income (loss) per common share, basic and diluted | $ | (0.09 | ) | $ | 1.44 | $ | (0.14 | ) | $ | 0.91 |
(1) | Excludes weighted average common shares of 207,532 and 224,769 for the three months ended September 30, 2019 and 2018, respectively, and 204,919 and 223,921 for the nine months ended September 30, 2019 and 2018, respectively, for certain share awards as the effect of their inclusion would have been antidilutive. |
10. | REVENUES |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues: | |||||||||||||||
U.S. | $ | 38,027 | $ | 38,229 | $ | 107,016 | $ | 117,673 | |||||||
International | 16,632 | 13,665 | 46,553 | 43,443 | |||||||||||
Total operating revenues | $ | 54,659 | $ | 51,894 | $ | 153,569 | $ | 161,116 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Oil and gas flight services: | |||||||||||||||
U.S. | $ | 36,226 | $ | 35,473 | $ | 101,850 | $ | 109,778 | |||||||
International | 14,740 | 13,665 | 42,855 | 43,443 | |||||||||||
Total oil and gas | 50,966 | 49,138 | 144,705 | 153,221 | |||||||||||
Emergency response services | 3,693 | 2,756 | 8,864 | 7,895 | |||||||||||
Total operating revenues | $ | 54,659 | $ | 51,894 | $ | 153,569 | $ | 161,116 | |||||||
Dry-leasing revenues: | |||||||||||||||
U.S. | 610 | 1,142 | 2,055 | 2,984 | |||||||||||
International | 3,640 | 1,574 | 10,058 | 5,560 | |||||||||||
Total revenues | $ | 58,909 | $ | 54,610 | $ | 165,682 | $ | 169,660 |
1. | Identify the contract with a customer; |
2. | Identify the performance obligations in the contract; |
3. | Determine the transaction price; |
4. | Allocate the transaction price to the performance obligations; and |
5. | Recognize revenue as the performance obligations are satisfied. |
11. | RELATED PARTY TRANSACTIONS |
12. | SHARE-BASED COMPENSATION |
Number of Shares | Weighted Average Grant Price | |||||
Non-vested as of December 31, 2018 | 513,766 | $ | 10.28 | |||
Restricted stock awards granted: | ||||||
Non-employee directors | 34,488 | $ | 10.35 | |||
Employees | 361,056 | $ | 10.35 | |||
Vested | (270,997 | ) | $ | 10.36 | ||
Forfeited | — | $ | — | |||
Non-vested as of September 30, 2019 | 638,313 | $ | 10.29 |
13. | GUARANTORS OF SECURITIES |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands, except share data) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 105,639 | $ | — | $ | 2,097 | $ | — | $ | 107,736 | |||||||||
Receivables: | |||||||||||||||||||
Trade, operating, net of allowance for doubtful accounts of $176 | — | 24,779 | 6,533 | — | 31,312 | ||||||||||||||
Trade, dry-leasing | — | 5,864 | — | — | 5,864 | ||||||||||||||
Tax receivable | — | 10 | 2,695 | — | 2,705 | ||||||||||||||
Other | — | 11,305 | 262 | — | 11,567 | ||||||||||||||
Inventories, net | — | 20,784 | 42 | — | 20,826 | ||||||||||||||
Prepaid expenses | 565 | 2,046 | 240 | — | 2,851 | ||||||||||||||
Total current assets | 106,204 | 64,788 | 11,869 | — | 182,861 | ||||||||||||||
Property and equipment | — | 884,816 | 16,764 | — | 901,580 | ||||||||||||||
Accumulated depreciation | — | (330,543 | ) | (4,187 | ) | — | (334,730 | ) | |||||||||||
Property and equipment, net | — | 554,273 | 12,577 | — | 566,850 | ||||||||||||||
Operating lease right-of-use | — | 8,095 | 1,812 | — | 9,907 | ||||||||||||||
Investments in consolidated subsidiaries | 183,226 | — | — | (183,226 | ) | — | |||||||||||||
Intangible assets | — | — | 1,094 | — | 1,094 | ||||||||||||||
Deferred income taxes | 12,774 | — | — | (12,774 | ) | — | |||||||||||||
Intercompany receivables | 294,405 | — | 47 | (294,452 | ) | — | |||||||||||||
Other assets | 815 | 5,145 | 403 | — | 6,363 | ||||||||||||||
Total assets | $ | 597,424 | $ | 632,301 | $ | 27,802 | $ | (490,452 | ) | $ | 767,075 | ||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable and accrued expenses | $ | 134 | $ | 10,247 | $ | 1,559 | $ | — | $ | 11,940 | |||||||||
Accrued wages and benefits | 32 | 7,216 | 1,712 | — | 8,960 | ||||||||||||||
Accrued interest | 3,261 | 60 | — | — | 3,321 | ||||||||||||||
Accrued income taxes | 2,922 | 10 | 13 | — | 2,945 | ||||||||||||||
Accrued other taxes | — | 1,693 | 293 | — | 1,986 | ||||||||||||||
Accrued contingencies | — | — | 548 | — | 548 | ||||||||||||||
Current portion of long-term debt | — | 1,663 | 182 | — | 1,845 | ||||||||||||||
Other current liabilities | 885 | 1,585 | 381 | — | 2,851 | ||||||||||||||
Total current liabilities | 7,234 | 22,474 | 4,688 | — | 34,396 | ||||||||||||||
Long-term debt | 133,662 | 25,069 | — | — | 158,731 | ||||||||||||||
Deferred income taxes | — | 116,968 | 1,246 | (12,774 | ) | 105,440 | |||||||||||||
Intercompany payables | — | 231,203 | 63,271 | (294,474 | ) | — | |||||||||||||
Operating lease liabilities | — | 6,731 | 1,435 | — | 8,166 | ||||||||||||||
Other liabilities | — | 850 | — | — | 850 | ||||||||||||||
Total liabilities | 140,896 | 403,295 | 70,640 | (307,248 | ) | 307,583 | |||||||||||||
Redeemable noncontrolling interest | — | 3 | 2,942 | — | 2,945 | ||||||||||||||
Equity: | |||||||||||||||||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,288,619 outstanding, exclusive of treasury shares | 224 | — | — | — | 224 | ||||||||||||||
Additional paid-in capital | 451,104 | 100,307 | 4,561 | (104,869 | ) | 451,103 | |||||||||||||
Retained earnings | 15,352 | 128,696 | (50,341 | ) | (78,335 | ) | 15,372 | ||||||||||||
Treasury shares, at cost, 1,149,820 shares | (10,152 | ) | — | — | — | (10,152 | ) | ||||||||||||
Total equity | 456,528 | 229,003 | (45,780 | ) | (183,204 | ) | 456,547 | ||||||||||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 597,424 | $ | 632,301 | $ | 27,802 | $ | (490,452 | ) | $ | 767,075 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands, except share data) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 48,396 | $ | — | $ | 2,357 | $ | — | $ | 50,753 | |||||||||
Receivables: | |||||||||||||||||||
Trade, operating, net of allowance for doubtful accounts of $261 | — | 27,509 | 5,797 | — | 33,306 | ||||||||||||||
Trade, dry-leasing | — | 3,803 | — | — | 3,803 | ||||||||||||||
Tax receivables | — | 6 | 3,181 | — | 3,187 | ||||||||||||||
Other | — | 1,949 | 394 | — | 2,343 | ||||||||||||||
Inventories, net | — | 20,633 | 40 | — | 20,673 | ||||||||||||||
Prepaid expenses | 398 | 1,219 | 190 | — | 1,807 | ||||||||||||||
Total current assets | 48,794 | 55,119 | 11,959 | — | 115,872 | ||||||||||||||
Property and equipment | — | 900,611 | 16,550 | — | 917,161 | ||||||||||||||
Accumulated depreciation | — | (314,567 | ) | (3,400 | ) | — | (317,967 | ) | |||||||||||
Net property and equipment | — | 586,044 | 13,150 | — | 599,194 | ||||||||||||||
Equity investments and advances | — | 27,112 | — | — | 27,112 | ||||||||||||||
Investments in consolidated subsidiaries | 172,950 | — | — | (172,950 | ) | — | |||||||||||||
Intangible assets | — | — | 1,107 | — | 1,107 | ||||||||||||||
Deferred income taxes | 9,904 | — | — | (9,904 | ) | — | |||||||||||||
Intercompany receivables | 366,541 | — | — | (366,541 | ) | — | |||||||||||||
Other assets | 1,251 | 20,231 | 96 | — | 21,578 | ||||||||||||||
Total assets | $ | 599,440 | $ | 688,506 | $ | 26,312 | $ | (549,395 | ) | $ | 764,863 | ||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable and accrued expenses | $ | 136 | $ | 11,357 | $ | 1,668 | $ | — | $ | 13,161 | |||||||||
Accrued wages and benefits | 43 | 7,743 | 1,481 | — | 9,267 | ||||||||||||||
Accrued interest | 500 | 69 | — | — | 569 | ||||||||||||||
Accrued income taxes | 918 | 6 | 49 | — | 973 | ||||||||||||||
Accrued other taxes | — | 768 | 500 | — | 1,268 | ||||||||||||||
Accrued contingencies | — | — | 630 | — | 630 | ||||||||||||||
Current portion of long-term debt | — | 1,663 | 395 | — | 2,058 | ||||||||||||||
Other current liabilities | 647 | 220 | 11 | — | 878 | ||||||||||||||
Total current liabilities | 2,244 | 21,826 | 4,734 | — | 28,804 | ||||||||||||||
Long-term debt | 133,900 | 26,317 | — | — | 160,217 | ||||||||||||||
Deferred income taxes | — | 117,015 | 1,245 | (9,903 | ) | 108,357 | |||||||||||||
Intercompany payables | — | 310,727 | 55,847 | (366,574 | ) | — | |||||||||||||
Other liabilities | — | 720 | 27 | — | 747 | ||||||||||||||
Total liabilities | 136,144 | 476,605 | 61,853 | (376,477 | ) | 298,125 | |||||||||||||
Redeemable noncontrolling interest | — | 3 | 3,299 | — | 3,302 | ||||||||||||||
Equity: | |||||||||||||||||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,765,404 shares outstanding, exclusive of treasury shares | 219 | — | — | — | 219 | ||||||||||||||
Additional paid-in capital | 447,299 | 100,306 | 4,562 | (104,869 | ) | 447,298 | |||||||||||||
Retained earnings | 18,254 | 111,482 | (43,402 | ) | (68,049 | ) | 18,285 | ||||||||||||
Treasury shares, at cost, 156,737 shares | (2,476 | ) | — | — | — | (2,476 | ) | ||||||||||||
Accumulated other comprehensive income, net of tax | — | 110 | — | — | 110 | ||||||||||||||
Total equity | 463,296 | 211,898 | (38,840 | ) | (172,918 | ) | 463,436 | ||||||||||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 599,440 | $ | 688,506 | $ | 26,312 | $ | (549,395 | ) | $ | 764,863 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues | $ | — | $ | 53,633 | $ | 14,681 | $ | (9,405 | ) | $ | 58,909 | ||||||||
Costs and expenses: | |||||||||||||||||||
Operating | — | 32,926 | 16,001 | (9,405 | ) | 39,522 | |||||||||||||
Administrative and general | 1,025 | 7,177 | 940 | — | 9,142 | ||||||||||||||
Depreciation | — | 9,100 | 212 | — | 9,312 | ||||||||||||||
Total costs and expenses | 1,025 | 49,203 | 17,153 | (9,405 | ) | 57,976 | |||||||||||||
Gains on asset dispositions, net | — | 754 | — | — | 754 | ||||||||||||||
Operating income (loss) | (1,025 | ) | 5,184 | (2,472 | ) | — | 1,687 | ||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 492 | 444 | 20 | — | 956 | ||||||||||||||
Interest expense | (3,263 | ) | (193 | ) | (8 | ) | — | (3,464 | ) | ||||||||||
Foreign currency gains, net | (81 | ) | (104 | ) | (533 | ) | — | (718 | ) | ||||||||||
Other, net | (4 | ) | 5 | (6 | ) | — | (5 | ) | |||||||||||
Total other income (expense) | (2,856 | ) | 152 | (527 | ) | — | (3,231 | ) | |||||||||||
Income (loss) before income taxes and equity earnings | (3,881 | ) | 5,336 | (2,999 | ) | — | (1,544 | ) | |||||||||||
Income tax (benefit) expense | (432 | ) | 947 | — | — | 515 | |||||||||||||
Income (loss) before equity earnings | (3,449 | ) | 4,389 | (2,999 | ) | — | (2,059 | ) | |||||||||||
Equity in earnings (losses) of subsidiaries | 1,541 | — | — | (1,541 | ) | — | |||||||||||||
Net income (loss) | (1,908 | ) | 4,389 | (2,999 | ) | (1,541 | ) | (2,059 | ) | ||||||||||
Net loss attributable to noncontrolling interest in subsidiary | — | — | 149 | — | 149 | ||||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | (1,908 | ) | $ | 4,389 | $ | (2,850 | ) | $ | (1,541 | ) | $ | (1,910 | ) |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues | $ | — | $ | 48,631 | $ | 13,623 | $ | (7,644 | ) | $ | 54,610 | ||||||||
Costs and expenses: | |||||||||||||||||||
Operating | — | 29,888 | 14,302 | (7,677 | ) | 36,513 | |||||||||||||
Administrative and general | 901 | 6,957 | 979 | — | 8,837 | ||||||||||||||
Depreciation | — | 9,316 | 225 | — | 9,541 | ||||||||||||||
Total costs and expenses | 901 | 46,161 | 15,506 | (7,677 | ) | 54,891 | |||||||||||||
Losses on asset dispositions, net | — | (148 | ) | — | — | (148 | ) | ||||||||||||
Litigation settlement proceeds | 42,000 | — | — | — | 42,000 | ||||||||||||||
Operating income (loss) loss | 41,099 | 2,322 | (1,883 | ) | 33 | 41,571 | |||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 171 | 448 | 113 | — | 732 | ||||||||||||||
Interest expense | (3,330 | ) | (204 | ) | (15 | ) | — | (3,549 | ) | ||||||||||
Foreign currency losses, net | (10 | ) | (16 | ) | (68 | ) | — | (94 | ) | ||||||||||
Other, net | — | 21 | (6 | ) | — | 15 | |||||||||||||
Total other income (expense) | (3,169 | ) | 249 | 24 | — | (2,896 | ) | ||||||||||||
Income (loss) before income taxes and equity earnings | 37,930 | 2,571 | (1,859 | ) | 33 | 38,675 | |||||||||||||
Income tax expense | 3,928 | 3,933 | — | — | 7,861 | ||||||||||||||
Income (loss) before equity earnings | 34,002 | (1,362 | ) | (1,859 | ) | 33 | 30,814 | ||||||||||||
Equity in earnings (losses) of subsidiaries | (2,747 | ) | 465 | — | 2,747 | 465 | |||||||||||||
Net income (loss) | 31,255 | (897 | ) | (1,859 | ) | 2,780 | 31,279 | ||||||||||||
Net loss attributable to noncontrolling interest in subsidiary | — | — | 10 | — | 10 | ||||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | 31,255 | $ | (897 | ) | $ | (1,849 | ) | $ | 2,780 | $ | 31,289 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues | $ | — | $ | 148,992 | $ | 42,835 | $ | (26,145 | ) | $ | 165,682 | ||||||||
Costs and expenses: | |||||||||||||||||||
Operating | — | 94,977 | 46,195 | (26,134 | ) | 115,038 | |||||||||||||
Administrative and general | 4,009 | 20,135 | 2,768 | — | 26,912 | ||||||||||||||
Depreciation | — | 27,572 | 710 | — | 28,282 | ||||||||||||||
Total costs and expenses | 4,009 | 142,684 | 49,673 | (26,134 | ) | 170,232 | |||||||||||||
Gains on asset dispositions, net | — | 562 | — | — | 562 | ||||||||||||||
Operating income (loss) | (4,009 | ) | 6,870 | (6,838 | ) | (11 | ) | (3,988 | ) | ||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 1,135 | 1,423 | 84 | — | 2,642 | ||||||||||||||
Interest expense | (9,721 | ) | (614 | ) | (22 | ) | — | (10,357 | ) | ||||||||||
Loss on sale of investments | (569 | ) | — | — | — | (569 | ) | ||||||||||||
Foreign currency gains, net | (93 | ) | 15 | (496 | ) | — | (574 | ) | |||||||||||
Loss on debt extinguishment | (13 | ) | — | — | — | (13 | ) | ||||||||||||
Other, net | (20 | ) | 16 | (21 | ) | — | (25 | ) | |||||||||||
Total other income (expense) | (9,281 | ) | 840 | (455 | ) | — | (8,896 | ) | |||||||||||
Income (loss) before income taxes and equity earnings | (13,290 | ) | 7,710 | (7,293 | ) | (11 | ) | (12,884 | ) | ||||||||||
Income tax expense (benefit) | (114 | ) | 435 | — | — | 321 | |||||||||||||
Income (loss) before equity earnings | (13,176 | ) | 7,275 | (7,293 | ) | (11 | ) | (13,205 | ) | ||||||||||
Equity in earnings (losses) of subsidiaries | 10,275 | 9,935 | — | (10,275 | ) | 9,935 | |||||||||||||
Net income (loss) | (2,901 | ) | 17,210 | (7,293 | ) | (10,286 | ) | (3,270 | ) | ||||||||||
Net loss attributable to noncontrolling interest in subsidiary | — | — | 357 | — | 357 | ||||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | (2,901 | ) | $ | 17,210 | $ | (6,936 | ) | $ | (10,286 | ) | $ | (2,913 | ) |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues | $ | — | $ | 148,512 | $ | 42,252 | $ | (21,104 | ) | $ | 169,660 | ||||||||
Costs and expenses: | |||||||||||||||||||
Operating | — | 92,317 | 43,325 | (21,137 | ) | 114,505 | |||||||||||||
Administrative and general | 14,087 | 18,182 | 3,445 | — | 35,714 | ||||||||||||||
Depreciation | — | 29,283 | 728 | — | 30,011 | ||||||||||||||
Total costs and expenses | 14,087 | 139,782 | 47,498 | (21,137 | ) | 180,230 | |||||||||||||
Gains on asset dispositions, net | — | 2,269 | — | — | 2,269 | ||||||||||||||
Litigation settlement proceeds | 42,000 | — | — | — | 42,000 | ||||||||||||||
Operating income (loss) | 27,913 | 10,999 | (5,246 | ) | 33 | 33,699 | |||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 180 | 878 | 166 | — | 1,224 | ||||||||||||||
Interest expense | (10,925 | ) | (595 | ) | (126 | ) | — | (11,646 | ) | ||||||||||
Foreign currency losses, net | (66 | ) | (141 | ) | (888 | ) | — | (1,095 | ) | ||||||||||
Gain on debt extinguishment | — | — | 175 | — | 175 | ||||||||||||||
Other, net | — | 31 | (10 | ) | — | 21 | |||||||||||||
Total other income (expense) | (10,811 | ) | 173 | (683 | ) | — | (11,321 | ) | |||||||||||
Income (loss) before income taxes and equity earnings | 17,102 | 11,172 | (5,929 | ) | 33 | 22,378 | |||||||||||||
Income tax benefit | 1,075 | 3,474 | — | — | 4,549 | ||||||||||||||
Income (loss) before equity earnings | 16,027 | 7,698 | (5,929 | ) | 33 | 17,829 | |||||||||||||
Equity in earnings (losses) of subsidiaries | 3,655 | 1,577 | — | (3,655 | ) | 1,577 | |||||||||||||
Net income (loss) | 19,682 | 9,275 | (5,929 | ) | (3,622 | ) | 19,406 | ||||||||||||
Net loss attributable to noncontrolling interest in subsidiary | — | — | 310 | — | 310 | ||||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | 19,682 | $ | 9,275 | $ | (5,619 | ) | $ | (3,622 | ) | $ | 19,716 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net income (loss) | $ | (1,908 | ) | $ | 4,389 | $ | (2,999 | ) | $ | (1,541 | ) | $ | (2,059 | ) | |||||
Comprehensive income (loss) | (1,908 | ) | 4,389 | (2,999 | ) | (1,541 | ) | (2,059 | ) | ||||||||||
Comprehensive loss attributable to noncontrolling interest in subsidiary | — | — | 149 | — | 149 | ||||||||||||||
Comprehensive income (loss) attributable to Era Group Inc. | $ | (1,908 | ) | $ | 4,389 | $ | (2,850 | ) | $ | (1,541 | ) | $ | (1,910 | ) |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net income (loss) | $ | 31,255 | $ | (897 | ) | $ | (1,859 | ) | $ | 2,780 | $ | 31,279 | |||||||
Comprehensive income (loss) | 31,255 | (897 | ) | (1,859 | ) | 2,780 | 31,279 | ||||||||||||
Comprehensive loss attributable to noncontrolling interest in subsidiary | — | — | 10 | — | 10 | ||||||||||||||
Comprehensive income (loss) attributable to Era Group Inc. | $ | 31,255 | $ | (897 | ) | $ | (1,849 | ) | $ | 2,780 | $ | 31,289 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net income (loss) | $ | (2,901 | ) | $ | 17,210 | $ | (7,293 | ) | $ | (10,286 | ) | $ | (3,270 | ) | |||||
Other comprehensive loss: | |||||||||||||||||||
Foreign currency translation adjustments | — | (110 | ) | — | — | (110 | ) | ||||||||||||
Total other comprehensive loss | — | (110 | ) | — | — | (110 | ) | ||||||||||||
Comprehensive income (loss) | (2,901 | ) | 17,100 | (7,293 | ) | (10,286 | ) | (3,380 | ) | ||||||||||
Comprehensive loss attributable to noncontrolling interest in subsidiary | — | — | 357 | — | 357 | ||||||||||||||
Comprehensive income (loss) attributable to Era Group Inc. | $ | (2,901 | ) | $ | 17,100 | $ | (6,936 | ) | $ | (10,286 | ) | $ | (3,023 | ) |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net income (loss) | $ | 19,682 | $ | 9,275 | $ | (5,929 | ) | $ | (3,622 | ) | $ | 19,406 | |||||||
Other comprehensive loss: | |||||||||||||||||||
Foreign currency translation adjustments | — | (5 | ) | — | — | (5 | ) | ||||||||||||
Total other comprehensive loss | — | (5 | ) | — | — | (5 | ) | ||||||||||||
Comprehensive income (loss) | 19,682 | 9,270 | (5,929 | ) | (3,622 | ) | 19,401 | ||||||||||||
Comprehensive loss attributable to noncontrolling interest in subsidiary | — | — | 310 | — | 310 | ||||||||||||||
Comprehensive income (loss) attributable to Era Group Inc. | $ | 19,682 | $ | 9,270 | $ | (5,619 | ) | $ | (3,622 | ) | $ | 19,711 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 66,231 | $ | (46,413 | ) | $ | 27 | $ | — | $ | 19,845 | ||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | — | (5,056 | ) | (112 | ) | — | (5,168 | ) | |||||||||||
Proceeds from disposition of property and equipment | — | 9,252 | — | — | 9,252 | ||||||||||||||
Purchase of investments | (5,000 | ) | — | — | — | (5,000 | ) | ||||||||||||
Proceeds from sale of investments | 4,430 | — | — | — | 4,430 | ||||||||||||||
Proceeds from sale of equity investees | — | 34,712 | — | — | 34,712 | ||||||||||||||
Principal payments on notes due from equity investees | — | 2,334 | — | — | 2,334 | ||||||||||||||
Principal payments on third party notes receivable | — | 5,340 | — | — | 5,340 | ||||||||||||||
Net cash provided by (used in) investing activities | (570 | ) | 46,582 | (112 | ) | — | 45,900 | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Payments on long-term debt | — | (1,246 | ) | (212 | ) | — | (1,458 | ) | |||||||||||
Extinguishment of long-term debt | (740 | ) | — | — | — | (740 | ) | ||||||||||||
Proceeds from share award plans | — | — | — | 1,077 | 1,077 | ||||||||||||||
Purchase of treasury shares | (7,676 | ) | — | — | — | (7,676 | ) | ||||||||||||
Borrowings and repayments of intercompany debt | — | 1,077 | — | (1,077 | ) | — | |||||||||||||
Net cash used in financing activities | (8,416 | ) | (169 | ) | (212 | ) | — | (8,797 | ) | ||||||||||
Effects of exchange rate changes on cash and cash equivalents | — | — | 35 | — | 35 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | 57,245 | — | (262 | ) | — | 56,983 | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 48,396 | — | 2,357 | — | 50,753 | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 105,641 | $ | — | $ | 2,095 | $ | — | $ | 107,736 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||||||
(in thousands) | |||||||||||||||||||
Net cash provided by operating activities | $ | 35,550 | $ | 13,319 | $ | 1,483 | $ | — | $ | 50,352 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | — | (7,461 | ) | (225 | ) | — | (7,686 | ) | |||||||||||
Proceeds from disposition of property and equipment | — | 29,520 | — | — | 29,520 | ||||||||||||||
Dividends received from equity investees | — | 1,000 | — | — | 1,000 | ||||||||||||||
Principal payments on notes due from equity investees | — | 401 | — | — | 401 | ||||||||||||||
Principal payments on third party notes receivable | — | 620 | — | — | 620 | ||||||||||||||
Net cash provided by (used in) investing activities | — | 24,080 | (225 | ) | — | 23,855 | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Long-term debt issuance costs | — | — | — | (1,295 | ) | (1,295 | ) | ||||||||||||
Payments on long-term debt | — | (1,247 | ) | (2,315 | ) | (39,000 | ) | (42,562 | ) | ||||||||||
Proceeds from share award plans | — | — | — | 893 | 893 | ||||||||||||||
Borrowings and repayments of intercompany debt | — | (39,402 | ) | — | 39,402 | — | |||||||||||||
Net cash used in financing activities | — | (40,649 | ) | (2,315 | ) | — | (42,964 | ) | |||||||||||
Effects of exchange rate changes on cash and cash equivalents | — | — | (445 | ) | — | (445 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 35,550 | (3,250 | ) | (1,502 | ) | — | 30,798 | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 10,800 | 3,250 | 2,783 | — | 16,833 | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 46,350 | $ | — | $ | 1,281 | $ | — | $ | 47,631 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | 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 limited number of customers and the reduction of its customer base as a result of bankruptcies or consolidation; |
• | risks that the Company’s customers reduce or cancel contracted services or tender processes or obtain comparable services through other forms of transportation; |
• | the Company’s dependence on U.S. government agency contracts that are subject to budget appropriations; |
• | cost savings initiatives implemented by the Company’s customers; |
• | risks inherent in operating helicopters; |
• | the Company’s ability to maintain an acceptable safety record and level of reliability; |
• | the impact of increased U.S. and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities; |
• | the impact of a grounding of all or a portion of the Company’s fleet for extended periods of time or indefinitely on the Company’s business, including its operations and ability to service customers, results of operations or financial condition and/or the market value of the affected helicopters; |
• | the Company’s ability to successfully expand into other geographic and aviation service markets; |
• | 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 asset values and cost to purchase helicopters, spare parts and related services; |
• | risks related to investing in new lines of aviation service without realizing the expected benefits; |
• | risks of engaging in competitive processes or expending significant resources for strategic opportunities, with no guaranty of recoupment; |
• | the Company’s reliance on a limited number of helicopter manufacturers and suppliers; |
• | the Company’s ongoing need to replace aging helicopters; |
• | the Company’s reliance on the secondary helicopter market to dispose of used helicopters and parts; |
• | information technology related risks; |
• | 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; |
• | adverse weather conditions and seasonality; |
• | risks associated with the Company’s debt structure; |
• | the Company’s counterparty credit risk exposure; |
• | the impact of operational and financial difficulties of the Company’s joint ventures and partners and the risks associated with identifying and securing joint venture partners when needed; |
• | conflict with the other owners of the Company’s non-wholly owned subsidiaries and other equity investees; |
• | adverse results of legal proceedings; |
• | risks associated with significant increases in fuel costs; |
• | 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. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||
(in thousands) | % | (in thousands) | % | (in thousands) | % | (in thousands) | % | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
United States | $ | 38,637 | 66 | $ | 39,371 | 72 | $ | 109,071 | 66 | $ | 120,657 | 71 | |||||||||||||||
International | 20,272 | 34 | 15,239 | 28 | 56,611 | 34 | 49,003 | 29 | |||||||||||||||||||
Total revenues | 58,909 | 100 | 54,610 | 100 | 165,682 | 100 | 169,660 | 100 | |||||||||||||||||||
Costs and Expenses: | |||||||||||||||||||||||||||
Operating: | |||||||||||||||||||||||||||
Personnel | 14,359 | 24 | 13,935 | 26 | 41,209 | 25 | 41,716 | 25 | |||||||||||||||||||
Repairs and maintenance | 13,002 | 22 | 10,823 | 20 | 39,097 | 23 | 36,125 | 21 | |||||||||||||||||||
Insurance and loss reserves | 1,296 | 2 | 1,244 | 2 | 3,408 | 2 | 3,893 | 2 | |||||||||||||||||||
Fuel | 3,924 | 7 | 3,695 | 7 | 11,004 | 7 | 11,056 | 7 | |||||||||||||||||||
Leased-in equipment | 48 | — | 51 | — | 163 | — | 584 | — | |||||||||||||||||||
Other | 6,893 | 11 | 6,765 | 12 | 20,157 | 12 | 21,131 | 12 | |||||||||||||||||||
Total operating expenses | 39,522 | 66 | 36,513 | 67 | 115,038 | 69 | 114,505 | 67 | |||||||||||||||||||
Administrative and general | 9,142 | 16 | 8,837 | 16 | 26,912 | 16 | 35,714 | 21 | |||||||||||||||||||
Depreciation and amortization | 9,312 | 16 | 9,541 | 17 | 28,282 | 17 | 30,011 | 18 | |||||||||||||||||||
Total costs and expenses | 57,976 | 98 | 54,891 | 100 | 170,232 | 102 | 180,230 | 106 | |||||||||||||||||||
Gains (losses) on asset dispositions, net | 754 | 1 | (148 | ) | — | 562 | — | 2,269 | 1 | ||||||||||||||||||
Litigation settlement proceeds | — | — | 42,000 | 76 | — | — | 42,000 | 25 | |||||||||||||||||||
Operating income (loss) | 1,687 | 3 | 41,571 | 76 | (3,988 | ) | (2 | ) | 33,699 | 20 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||
Interest income | 956 | 2 | 732 | 1 | 2,642 | 1 | 1,224 | 1 | |||||||||||||||||||
Interest expense | (3,464 | ) | (6 | ) | (3,549 | ) | (6 | ) | (10,357 | ) | (7 | ) | (11,646 | ) | (7 | ) | |||||||||||
Loss on sale of investments | — | — | — | — | (569 | ) | — | — | — | ||||||||||||||||||
Foreign currency losses, net | (718 | ) | (1 | ) | (94 | ) | — | (574 | ) | — | (1,095 | ) | (1 | ) | |||||||||||||
Gains (losses) on debt extinguishment | — | — | — | — | (13 | ) | — | 175 | — | ||||||||||||||||||
Other, net | (5 | ) | — | 15 | — | (25 | ) | — | 21 | — | |||||||||||||||||
Total other income (expense) | (3,231 | ) | (5 | ) | (2,896 | ) | (5 | ) | (8,896 | ) | (6 | ) | (11,321 | ) | (7 | ) | |||||||||||
Income (loss) before income taxes and equity earnings | (1,544 | ) | (3 | ) | 38,675 | 71 | (12,884 | ) | (8 | ) | 22,378 | 13 | |||||||||||||||
Income tax expense | 515 | 1 | 7,861 | 15 | 321 | — | 4,549 | 3 | |||||||||||||||||||
Income (loss) before equity earnings | (2,059 | ) | (4 | ) | 30,814 | 56 | (13,205 | ) | (8 | ) | 17,829 | 10 | |||||||||||||||
Equity earnings, net of tax | — | — | 465 | 1 | 9,935 | 6 | 1,577 | 1 | |||||||||||||||||||
Net income (loss) | (2,059 | ) | (4 | ) | 31,279 | 57 | (3,270 | ) | (2 | ) | 19,406 | 11 | |||||||||||||||
Net loss attributable to noncontrolling interest in subsidiary | 149 | — | 10 | — | 357 | — | 310 | — | |||||||||||||||||||
Net income (loss) attributable to Era Group Inc. | $ | (1,910 | ) | (3 | ) | $ | 31,289 | 57 | $ | (2,913 | ) | (2 | ) | $ | 19,716 | 11 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
(in thousands) | % | (in thousands) | % | (in thousands) | % | (in thousands) | % | ||||||||||||||||
Revenues: | |||||||||||||||||||||||
Oil and gas: (1) | |||||||||||||||||||||||
U.S. | $ | 36,226 | 62 | $ | 35,473 | 65 | $ | 101,850 | 62 | $ | 109,778 | 65 | |||||||||||
International | 14,740 | 25 | 13,665 | 25 | 42,855 | 26 | 43,443 | 25 | |||||||||||||||
Total oil and gas | 50,966 | 87 | 49,138 | 90 | 144,705 | 88 | 153,221 | 90 | |||||||||||||||
Dry-leasing | 4,250 | 7 | 2,716 | 5 | 12,113 | 7 | 8,544 | 5 | |||||||||||||||
Emergency response services | 3,693 | 6 | 2,756 | 5 | 8,864 | 5 | 7,895 | 5 | |||||||||||||||
$ | 58,909 | 100 | $ | 54,610 | 100 | $ | 165,682 | 100 | $ | 169,660 | 100 |
(1) | Primarily oil and gas activities, but also includes revenues from utility services, such as firefighting. |
Helicopters | Max. Pass.(1) | Cruise Speed (mph) | Approx. Range (miles) | Average Age (years) | |||||||||||
Heavy: | |||||||||||||||
S92 | 4 | 19 | 175 | 620 | 3 | ||||||||||
H225 | 1 | 19 | 162 | 582 | 11 | ||||||||||
AW189 | 4 | 16 | 173 | 490 | 3 | ||||||||||
9 | |||||||||||||||
Medium: | |||||||||||||||
AW139 | 36 | 12 | 173 | 426 | 10 | ||||||||||
S76 C+/C++ | 5 | 12 | 161 | 348 | 13 | ||||||||||
B212 | 5 | 11 | 115 | 299 | 40 | ||||||||||
46 | |||||||||||||||
Light—twin engine: | |||||||||||||||
A109 | 7 | 7 | 161 | 405 | 13 | ||||||||||
EC135 | 10 | 7 | 138 | 288 | 10 | ||||||||||
BO105 | 3 | 4 | 138 | 276 | 30 | ||||||||||
20 | |||||||||||||||
Light—single engine: | |||||||||||||||
A119 | 13 | 7 | 161 | 270 | 13 | ||||||||||
AS350 | 17 | 5 | 138 | 361 | 22 | ||||||||||
30 | |||||||||||||||
Total Fleet | 105 | 14 |
(1) | In typical configuration for our operations. |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Cash flows provided by or (used in): | |||||||
Operating activities | $ | 19,845 | $ | 50,352 | |||
Investing activities | 45,900 | 23,855 | |||||
Financing activities | (8,797 | ) | (42,964 | ) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 35 | (445 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | $ | 56,983 | $ | 30,798 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Operating income before depreciation and gains (losses) on asset dispositions, net | $ | 23,732 | $ | 61,441 | |||
Changes in operating assets and liabilities before interest and income taxes | (1,170 | ) | (6,593 | ) | |||
Interest paid, net of capitalized interest of $0 and $97 in 2019 and 2018, respectively | (6,690 | ) | (7,770 | ) | |||
Interest received | 2,415 | 610 | |||||
Income taxes paid | (1,255 | ) | (63 | ) | |||
Other | 2,813 | 2,727 | |||||
Total cash flows provided by operating activities | $ | 19,845 | $ | 50,352 |
• | Net proceeds from the sale of equity investees were $34.7 million. |
• | Proceeds from the disposition of property and equipment were $9.3 million. |
• | Proceeds from the sale of investments were $4.4 million. |
• | Net principal payments received from equity investees and third parties were $7.7 million. |
• | Capital expenditures were $5.2 million, which consisted primarily of spare helicopter parts and leasehold improvements. |
• | Purchase of investments was $5.0 million. |
• | Proceeds from the disposition of property and equipment were $29.5 million. |
• | Net principal payments received from equity investees and third parties were $1.0 million. |
• | Dividends received from equity investees were $1.0 million. |
• | Capital expenditures were $7.7 million, which consisted primarily of helicopter acquisitions, spare helicopter parts, and leasehold improvements. |
• | Proceeds from share award plans were $1.1 million. |
• | Purchases of treasury shares were $7.7 million. |
• | Principal payments on long-term debt were $1.5 million. |
• | Extinguishment of a portion of the 7.750% Senior Notes was $0.7 million. |
• | Proceeds from share award plans were $0.9 million. |
• | Principal payments on long-term debt, including our Revolving Credit Facility, were $42.6 million. |
• | Long-term debt issuance costs were $1.3 million, incurred in connection with the amendment of the Revolving Credit Facility. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
Total Number of Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||
July 1, 2019 - July 31, 2019 | 188,553 | $ | 8.45 | 188,553 | $ | 15,298,578 | |||||||
August 1, 2019 - August 31, 2019 | — | $ | — | — | $ | 15,298,578 | |||||||
September 1, 2019 - September 30, 2019(1) | 2,786 | $ | 9.63 | — | $ | 15,298,578 |
ITEM 6. | EXHIBITS |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
Era Group Inc. (Registrant) | |||||
DATE: | November 5, 2019 | By: | /s/ Jennifer D. Whalen | ||
Jennifer D. Whalen, Senior Vice President, Chief Financial Officer | |||||
1. | I have reviewed this quarterly report on Form 10-Q of Era Group Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 5, 2019 | |
/s/ Christopher S. Bradshaw | ||
Name: | Christopher S. Bradshaw | |
Title: | President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Era Group Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 5, 2019 | |
/s/ Jennifer D. Whalen | ||
Name: | Jennifer D. Whalen | |
Title: | Senior Vice President, Chief Financial Officer (Principal Financial Officer) |
Date: | November 5, 2019 | |
/s/ Christopher S. Bradshaw | ||
Name: | Christopher S. Bradshaw | |
Title: | President and Chief Executive Officer (Principal Executive Officer) |
Date: | November 5, 2019 | |
/s/ Jennifer D. Whalen | ||
Name: | Jennifer D. Whalen | |
Title: | Senior Vice President, Chief Financial Officer (Principal Financial Officer) |
LEASES - Reported Balances (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Other current liabilities | $ 1,822 |
Long-term lease liabilities | 8,166 |
Total operating lease liabilities | $ 9,988 |
FAIR VALUE MEASUREMENTS - Estimated Fair Value Of Other Financial Assets And Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, including current portion | $ 160,576 | $ 162,275 | |||
Purchase of investments | $ 5,000 | 5,000 | $ 0 | ||
Cash proceeds from sale of investment | $ 4,400 | 4,430 | $ 0 | ||
Net loss on sale of investments | $ 600 | ||||
Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, including current portion | 0 | 0 | |||
Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, including current portion | 168,920 | 159,367 | |||
Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, including current portion | $ 0 | $ 0 |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Cash flows from operating activities: | ||
Net loss | $ (3,270) | $ 19,406 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 28,282 | 30,011 |
Share-based compensation | 2,733 | 2,180 |
Bad debt expense, net | 41 | 0 |
Interest income | (227) | (614) |
Non-cash penalty and interest expenses | 0 | 607 |
Gains on asset dispositions, net | (562) | (2,269) |
Debt discount amortization | 203 | 188 |
Amortization of deferred financing costs | 722 | 1,173 |
Loss on sale of investments | 569 | 0 |
Foreign currency losses, net | 592 | 1,097 |
Losses (gains) on debt extinguishment, net | 13 | (175) |
Deferred income tax (benefit) expense | (2,887) | 1,541 |
Equity earnings, net of tax | (9,935) | (1,577) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in receivables | 176 | (2,390) |
(Increase) decrease in prepaid expenses and other assets | (726) | 393 |
Increase in accounts payable, accrued expenses and other liabilities | 4,121 | 781 |
Net cash provided by operating activities | 19,845 | 50,352 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (5,168) | (7,686) |
Proceeds from disposition of property and equipment | 9,252 | 29,520 |
Purchase of investments | (5,000) | 0 |
Proceeds from sale of investments | 4,430 | 0 |
Dividends received from equity investees | 0 | 1,000 |
Proceeds from sale of equity investees, net | 34,712 | 0 |
Principal payments on notes due from equity investees | 2,334 | 401 |
Principal payments on third party notes receivable | 5,340 | 620 |
Net cash provided by investing activities | 45,900 | 23,855 |
Cash flows from financing activities: | ||
Long-term debt issuance costs | 0 | (1,295) |
Payments on long-term debt | (1,458) | (42,562) |
Extinguishment of long-term debt | (740) | 0 |
Proceeds from share award plans | 1,077 | 893 |
Purchase of treasury shares | (7,676) | 0 |
Net cash used in financing activities | (8,797) | (42,964) |
Effects of exchange rate changes on cash and cash equivalents | 35 | (445) |
Net increase in cash, cash equivalents and restricted cash | 56,983 | 30,798 |
Cash, cash equivalents and restricted cash, beginning of period | 50,753 | 16,833 |
Cash, cash equivalents and restricted cash, end of period | 107,736 | 47,631 |
Supplemental cash flow information: | ||
Cash paid for interest | 6,690 | 7,867 |
Interest capitalized during the period | 0 | 97 |
Interest, net of amounts capitalized | 6,690 | 7,770 |
Cash paid for income taxes | $ 1,255 | $ 63 |
LEASES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES The Company leases land, hangars, buildings, fuel tanks and tower sites under operating lease agreements. The Company determines if an arrangement is a lease at inception, and many of these leases offer an option for renewal or extension. The adoption of ASC 842 allows the Company to retain its current classification of leases, and the optional practical expedience rule has allowed the use of the current-period adjustment method to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the current period rather than the restatement of prior year lease amounts. The majority of the bases from which the Company operates are leased, with current remaining terms between one and sixty years. The lease expense on those contracts with initial terms of twelve months or less are recognized on a straight-line basis over the lease term and are not recorded on the balance sheet. The Company does not currently maintain any finance leases and has only operating lease agreements. The Company’s maturity analysis of lease payments under operating leases that had a remaining term in excess of one year as of December 31, 2018 was as follows (in thousands):
The Company’s maturity analysis of lease payments under operating leases that have a remaining term in excess of one year as of September 30, 2019 was as follows (in thousands):
During the three and nine months ended September 30, 2019, the Company recognized $1.3 million and $2.9 million of operating lease expense, respectively. Included in these amounts was $0.7 million and $1.2 million for contracts with remaining terms of less than one year for the three and nine months ended September 30, 2019, respectively.
As of September 30, 2019, other information related to these leases was as follows:
The Company generates revenues as a lessor from its dry-leasing line of service that require a fixed monthly fee for the customer’s right to use the helicopter and, where applicable, additional charges as compensation for any support the Company may provide to the customer. Revenues from dry-leasing contracts are shown on the face of the statement of operations. In 2018, the Company disposed of six H225 heavy helicopters through sales-type leases. During the three and nine months ended September 30, 2019, the Company recognized interest income on these leases of $0.4 million and $1.4 million, respectively. During the three months ended September 30, 2019, the Company completed the final sale of two of these helicopters and received cash proceeds of $5.0 million. As of September 30, 2019, the Company had remaining receivables of $13.6 million, of which $9.8 million is due within a year and the remaining balance of $3.8 million is due within two years. |
COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Fleet. The Company’s unfunded capital commitments as of September 30, 2019 consisted primarily of agreements to purchase helicopters and totaled $78.2 million, which is payable beginning in 2020 through 2021. The Company also had $1.3 million of deposits paid on options not yet exercised. All of the Company’s capital commitments (inclusive of deposits paid on options not yet exercised) may be terminated without further liability other than aggregate liquidated damages of $2.1 million. Included in these commitments are orders to purchase three AW189 heavy helicopters and five AW169 light twin helicopters. The AW189 helicopters are scheduled to be delivered in 2020 and 2021. Delivery dates for the AW169 helicopters have yet to be determined. In addition, the Company had outstanding options to purchase up to ten additional AW189 helicopters. If these options are exercised, the helicopters would be scheduled for delivery in 2021 and 2022. Brazilian Tax Disputes. In connection with its ownership of Aeróleo and its operations in Brazil, the Company has several ongoing legal disputes related to the local, municipal and federal taxation requirements in Brazil, including assessments associated with the import and re-export of its helicopters in Brazil. The legal disputes are related to: (i) municipal tax assessments arising under the authorities in Rio de Janeiro (for the period between 2000 and 2005) and Macaé (for the period between 2001 to 2006) (collectively, the “Municipal Tax Disputes”); (ii) social security contributions that one of its customers was required to remit from 1995 to 1998; (iii) penalties assessed due to its alleged failure to comply with certain deadlines related to the helicopters the Company imports and exports in and out of Brazil; and (iv) fines sought by taxing authorities in Brazil related to its use of certain tax credits used to offset certain social tax liabilities (collectively, the “Tax Disputes”). The aggregate amount at issue for the Tax Disputes is $13.3 million. The Municipal Tax Disputes are the largest contributor to the total amount being sought from Aeróleo, with approximately $9.9 million at issue. In addition to the foregoing Tax Disputes (and unrelated thereto), Aeróleo is engaged in two additional civil litigation matters relating to: (i) a dispute with its former tax consultant who has alleged that $0.5 million is due and payable as a contingency fee related to execution of certain tax strategies; and (ii) a fatal accident that occurred in 1983 that was previously settled with the plaintiffs’ in the U.S. (the “Civil Disputes”). With respect to the fatal accident, the plaintiffs are seeking to collect additional amounts in Brazil despite the previous settlement agreed upon by the parties in the U.S. The Company continues to evaluate and assess various legal strategies for each of the Tax Disputes and the Civil Disputes. As is customary for certain legal matters in Brazil, Aeróleo has already deposited amounts as security into an escrow account to pursue further legal appeals in several of the Tax Disputes and the Civil Disputes. As of September 30, 2019, the Company has deposited $5.1 million into escrow accounts controlled by the court with respect to the Tax Disputes and the Civil Disputes, and the Company has fully reserved such amounts subject to final determination and the judicial release of such escrow deposits. These estimates are based on its assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intentions and experience. Aeróleo plans to defend the cases vigorously. As of September 30, 2019, it is not possible to determine the outcome of the Tax Disputes or the Civil Disputes, but the Company does not expect that an outcome would have a material adverse effect on its business, financial position or results of operations. General Litigation and Disputes In the normal course of business, the Company is involved in various litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. In addition, from time to time, the Company is involved in tax and other disputes with various government agencies. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto as appropriate. It is possible that a change in its estimates related to these exposures could occur, but the Company does not expect such changes in estimated costs would have a material effect on its business, consolidated financial position or results of operations. |
SHARE-BASED COMPENSATION |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Restricted Stock Awards. The number of shares and weighted average grant price of restricted stock awards during the nine months ended September 30, 2019 were as follows:
The total fair value of shares vested during each of the nine months ended September 30, 2019 and 2018, determined using the closing price on the grant date, was $2.8 million. Stock Options. The Company did not grant any stock options during the nine months ended September 30, 2019. Employee Stock Purchase Plan (“ESPP”). During the nine months ended September 30, 2019, the Company issued 120,754 shares under the ESPP. As of September 30, 2019, 101,624 shares remain available for issuance under the ESPP. Total share-based compensation expense, which includes stock options, restricted stock and the ESPP, was $2.7 million and $2.2 million for the nine months ended September 30, 2019 and 2018, respectively. |
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