Erickson Air-Crane Incorporated Announces Record Full-Year and Fourth Quarter Results

  Erickson Air-Crane Incorporated Announces Record Full-Year and Fourth
  Quarter Results

Business Wire

PORTLAND, Ore. -- March 11, 2013

Erickson Air-Crane Incorporated (NASDAQ: EAC) (“Erickson Air-Crane”,
“Erickson”, the “Company”, “we”, “us” and “our”), a leading operator and the
manufacturer of the powerful Erickson S-64 Aircrane heavy-lift helicopter,
today announced financial results for the fourth quarter and full year ended
December 31, 2012.

Full-Year 2012 highlights include:

  *Revenue increased 18.4% to $180.8 million
  *Flight hours increased 18.9% to 12,075 hours
  *Operating Income doubled to $33.4 million
  *Adjusted EBITDA increased 77.4% to $44.5 million

Fourth Quarter 2012 highlights include:

  *Revenue increased 27.2% to $39.1 million
  *Flight hours increased 14.6% to 1,766 hours
  *Operating Income increased $5.1 million to $1.5 million
  *Adjusted EBITDA increased $6.2 million to $4.5 million

Full-Year Results

Revenues for the year ended December 31, 2012 increased by 18.4% compared with
the full year of 2011, rising to $180.8 million. The Company experienced
strong growth in both of its business segments as compared with the prior
year, driven by new firefighting contracts, an active fire season and the
Company’s expansion of infrastructure construction, especially in support of
the oil-and-gas market in South America. Full-year net income attributable to
Erickson Air-Crane was $15.2 million, or pro forma earnings per share (“EPS”)
of $1.56, at the top end of prior guidance. This compares with prior year net
income of $15.9 million, which included a net $11.2 million benefit from the
reversal of accrued interest and taxes related to an audit by the IRS that was
settled in our favor. The Company’s pro forma EPS assumes that the
recapitalization and IPO had taken place on January 1, 2012 and that 9.7
million fully diluted shares used in the calculation were outstanding the
entire year.

Udo Rieder, President and Chief Executive Officer of Erickson Air-Crane,
commented, “This was an outstanding year for Erickson. Erickson’s leadership
position in the heavy-lift market continues to strengthen and we are confident
in our ability to build our business in related sectors.”

The Company’s full-year operating income increased by 101.4%, rising to $33.4
million as compared with the prior year’s $16.6 million. Full-year Adjusted
EBITDA (a non-GAAP measured described below) increased by 77.4% to $44.5
million as compared with prior year, driven by a gross margin improvement of
420 basis points and by a reduction in operating expenses as a percentage of
sales of 340 basis points.

Fourth Quarter Results

Revenues for the three months ended December 31, 2012 increased by 27.2%
compared with the fourth quarter of 2011, rising to $39.1 million. As in
recent quarters, organic growth was broad-based in the fourth quarter of 2012,
with revenue increases in both of the Company’s business segments as compared
with the prior year. The net loss attributable to Erickson Air-Crane
Incorporated in the fourth quarter was $0.9 million, or a $0.10 loss per basic
and diluted share. Included in the fourth quarter 2012 were $0.2 million or
$0.02 per share on an after-tax basis of expenses associated with the Air
Amazonia acquisition. Additionally, the company recorded a charge of $0.05 per
share related to its previously disclosed dispute with the Greek tax
authorities. These items were more than offset by the completion in the
quarter of the Company’s previously announced deal with San Diego Gas and
Electric (“SGD&E”) to purchase an Aircrane and related spare parts inventory.
As expected, the acceleration of deferred revenues associated with early
contract termination as a result of the SDG&E transaction favorably impacted
EPS by $0.39 per share in the fourth quarter.

Rieder continued, “We continue to see an excellent response to the value
provided by our unique heavy-lift S-64 platform in the increasingly diverse,
global end-markets we serve. Firefighting activity remained strong in the
fourth quarter, particularly with the US Forest Service, and our new
firefighting contract in San Diego helped drive a strong revenue performance
versus prior year. Additionally, we continued to see strong performance from
our fast-growing aerial services business in support of the South American
oil-and-gas industry, for which we deployed a second Aircrane at the end of
the fourth quarter.”

Adjusted EBITDA increased to $4.5 million in the fourth quarter as compared
with the prior year negative amount of $1.7 million. Profitability in the
fourth quarter was driven by a gross margin improvement of $3.4 million,
reflecting the benefit of the inclusion of SDG&E revenues and partially offset
by heavier spending on aircraft maintenance as a result of increased
firefighting flight hours. In addition, SG&A decreased by $1.7 million,
reflecting the absence of restructuring charges and bad debt expense in 2012,
which totaled $1.1 million and $2.5 million in the fourth quarter of 2011,
respectively. This SG&A improvement was partially offset by a charge of $0.8
million for potential interest and penalties associated with our dispute with
the Greek tax authorities, and as expected an increase in variable and
share-based compensation.

The Company announced on March 7, 2013 that it had received firm commitments
for a credit agreement led by Wells Fargo Bank that accommodates the liquidity
needs of the business and the financing of the Air Amazonia deal. This credit
facility would total up to $165.0 million, consisting of a $115.0 million term
loan facility and a revolving credit facility of up to $50.0 million.

On March 7, 2013 the Company also announced the execution of a binding term
sheet and significant progress toward completion of its previously announced
purchase of the Air Amazonia aerial services business from HRT Participacoes
em Petroleo, S.A. (“HRT”). The Company expects to close the transaction in the
second quarter of 2013.

Rieder said, “Following the purchase of the Air Amazonia fleet and operations
from HRT, we will be poised to greatly accelerate our presence in the booming
on-shore oil and gas sector in South America, an important source of strategic
growth. Importantly, we believe we can efficiently service HRT’s needs while
freeing up nearly half of the acquired fleet of 14 aircraft for other
customers, in Brazil and other markets. This highly accretive transaction will
accelerate our transformation from a leader in the heavy-lift category to a
diversified, global air services business. It is significant that this
acquisition provides us an entry into the passenger transport and medium-lift
markets, where we see significant demand from a wide range of our existing and
prospective customers. Following the closing of the Air Amazonia transaction,
we will be positioned to greatly diversify our operations and expand the range
and scope of our growth opportunities, as well as enhance our ability to
create significant value for our shareholders.”

Rieder concluded, “Erickson Air-Crane is poised to drive top-line growth in
2013 and beyond. With the Air Amazonia transaction, we will be able to attack
an expanded range of market opportunities by geography and end-markets
utilizing a wide variety of helicopter platforms. We also anticipate reduced
seasonality and improved profitability. We regard this transaction as a
natural extension of our strategy and an excellent use of capital. At the same
time, we will take additional decisive steps to grow our business and drive
value to our shareholders.”

Conference Call

The Company noted that it will hold a conference call to discuss its earnings
results for the fiscal year and fourth quarter ended December 31, 2012 on
Monday, March 11, 2013 at 8:30 am ET 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 To access the call, dial toll-free
1-888-505-4375 or 1-719-325-2429 (international). The pass code is 7685194.

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 7685194.
The replay will be available beginning at 11:30 a.m. ET on Monday, March 11,
2013 and will last through 11:59 p.m. ET March 25, 2013.

                         -- FINANCIAL TABLES FOLLOW –

(in thousands, except share and per share data)
                     Three Months        Three Months
                     Ended               Ended              Year Ended          Year Ended
                     December 31,        December 31,       December 31,        December 31,
                      2012              2011             2012              2011     
Net revenues:
Aerial               $ 31,350            $ 27,402           $ 161,405           $ 138,637
Manufacturing         7,727             3,313            19,419            14,132   
Total net              39,077              30,715             180,824             152,769
Cost of
Aerial                 25,962              18,291             109,623             93,566
Manufacturing         2,598             5,336            9,782             13,730   
Total cost of         28,560            23,627           119,405           107,296  
Gross profit           10,517              7,088              61,419              45,473
General and            5,827               3,489              17,232              13,023
Research and           1,258               1,604              4,683               4,827
Selling and            1,894               4,471              6,071               9,940
Restructuring         -                 1,084            -                 1,084    
operating             8,979             10,648           27,986            28,874   
Operating              1,538               (3,560   )         33,433              16,599
income (loss)
Other income
Interest               -                   -                  -                   7
Interest               (1,453    )         (2,594   )         (6,990    )         (9,157   )
(expense)              -                   3,015              -                   2,745
related to tax
of debt                (322      )         (322     )         (1,174    )         (875     )
issuance costs
Gain (loss) on
disposal of            (5        )         21                 (5        )         26
foreign                (350      )         358                (322      )         1,819
exchange gain
foreign                581                 (553     )         788                 (956     )
exchange gain
Other income          (802      )        476              119               1,126    
(expense), net
Total other
income                (2,351    )        401              (7,584    )        (5,265   )
Income (loss)
noncontrolling         (813      )         (3,159   )         25,849              11,334
interest and
income taxes
Income tax
expense               45                (11,522  )        10,213            (4,926   )
Net income             (858      )         8,363              15,636              16,260
Less: Net
(income) loss
related to            (91       )        213              (406      )        (390     )
Net income
attributable           (949      )         8,576              15,230              15,870
to Erickson
Dividends on
redeemable            -                 2,422            2,795             9,151    
Net income
attributable         $ (949      )       $ 6,154           $ 12,435           $ 6,719    
to common
income (loss):
Net income           $ (858      )       $ 8,363            $ 15,636            $ 16,260
currency              19                (73      )        136               (402     )
Comprehensive          (839      )         8,290              15,772              15,858
income (loss)
income (loss)
attributable          (124      )        261              (435      )        (202     )
income (loss)
attributable         $ (963      )       $ 8,551           $ 15,337           $ 15,656   
to Erickson
Net income
(loss) per
to common
Basic                $ (0.10     )       $ 6,154.19        $ 1.78             $ 6,718.57 
Diluted              $ (0.10     )       $ 6,154.19        $ 1.78             $ 6,718.57 
average shares
Basic                 9,749,860         1,000            6,981,027         1,000    
Diluted               9,749,860         1,000            6,981,027         1,000    

(in thousands, except share and per share data)
                                                December          December 31,
                                                2012              2011       
Current assets:
Cash and cash equivalents                       $  1,468          $  268
Restricted cash                                    3,781             -
Accounts receivable net of allowance for
doubtful accounts of $460 and $476 in              24,446            26,528
2012 and 2011, respectively.
Prepaid expenses and other                         1,426             4,217
Income tax receivable                              1,048             1,248
Deferred tax assets                               8,208            7,602   
Total current assets                              40,377           39,863  
Restricted cash                                    -                 5,214
Aircrane support parts, net                        133,281           129,287
Aircranes, net                                     66,673            42,288
Property, plant, and equipment, net                14,435            14,341
Other noncurrent assets                           2,057            2,918   
Total assets                                    $  256,823        $  233,911 
Liabilities, redeemable preferred stock
and stockholders' equity (deficit)
Current liabilities:
Accounts payable                                $  8,746          $  8,480
Current portion of long-term debt                  71,202            6,500
Accrued and other current liabilities              19,662            19,323
Income taxed payable                              6,275            -       
Total current liabilities                         105,885          34,303  
Long-term debt, less current portion               26,674            124,070
Other long-term liabilities                        1,415             4,328
Deferred tax liabilities                          17,481           14,194  
Total liabilities                                  151,455           176,895
Series A redeemable preferred stock,
$0.0001 par value
Authorized— zero and 70,000 shares at
2012 and 2011, respectively; issued and
outstanding—zero and 34,999.5 shares at            -                 66,161
2012 and 2011, respectively; liquidation
preference of zero and $66,161 at 2012
and 2011, respectively
Stockholder's equity (deficit):
Common stock, $0.0001 par value.
Authorized110,000,000 and 2,300 shares at
2012 and 2011, respectively
Class A; designated 2,000; zero and 1,000
issued and outstanding at 2012 and 2011,           -                 1
Common stock; 9,726,785 and zero issued            1                 -
and outstanding at 2012 and 2011
Additional paid-in capital                         101,833           -
Retained earnings (accumulated deficit)            2,447             (9,988  )
Accumulated other comprehensive income            71               (36     )
Total stockholders' equity (deficit)              104,352          (10,023 )
attributable to Erickson Air Crane, Inc.
Noncontrolling interest                           1,016            878     
Total stockholders' equity (deficit)              105,368          (9,145  )
Total liabilities, redeemable preferred         $  256,823        $  233,911 
stock, and stockholder's equity

(in thousands)
                     Three             Three
                     Months            Months
                     Ended             Ended             Year Ended         Year Ended
                     December          December          December 31,       December 31,
                     31,               31,
                     2012             2011             2012              2011       
Cash flows
from operating
Net income           $ (858    )       $ 8,363           $ 15,636           $ 16,260
Adjustments to
reconcile net
income (loss)
to net cash
provided by
(used in)
Depreciation           2,682             1,699             8,976              7,300
Deferred               (6,108  )         (2,849  )         2,682              4,589
income taxes
interest on            598               1,080             3,137              3,158
interest on            -                 (3,015  )         -                  (2,745   )
Stock based            389               -                 2,118              -
Non-cash tax           -                 (9,451  )         -                  (9,451   )
of debt                322               322               1,174              875
issuance costs
Gain on sale           5                 (21     )         5                  (26      )
of equipment
Accounts               26,111            2,407             2,679              (4,648   )
expenses and           576               3,111             2,803              484
Income tax             744               (1,248  )         201                (1,248   )
support parts,         (7,652  )         (3,471  )         (14,670  )         (25,703  )
Accounts               409               (2,746  )         (85      )         (2,236   )
Accrued and
other current          (10,655 )         (813    )         199                (4,770   )
Income tax             4,896             1,565             6,215              1,498
long-term             (2,392  )        (1,240  )        (2,912   )        (4,060   )
Net cash
provided by
(used in)             9,067           (6,307  )        28,158           (20,723  )
Cash flows
from investing
Purchases of
property,              (18,395 )         (999    )         (22,736  )         (11,413  )
plant, and
Restricted             (4      )         18                1,438              (998     )
from, or
purchases of,          -                 -                 (297     )         (254     )
(decrease) in         129             3               103              (418     )
other assets
Net cash
provided by
(used in)             (18,270 )        (978    )        (21,492  )        (13,083  )
Cash flows
from financing
Proceeds from
issuance of
common stock,          -                 -                 31,454             -
net of
Borrowings of          98,747            70,906            291,234            317,737
Repayments of          (89,049 )         (66,381 )         (327,063 )         (284,220 )
Excess tax
benefits from          (695    )         -                 (695     )         -
equity awards
Debt issuance         (102    )        18              (376     )        (758     )
Net cash
provided by
(used in)             8,901           4,543           (5,446   )        32,759   
Effect of
exchange rates        -               (46     )        (20      )        (613     )
on cash and
Net increase
(decrease) in          (302    )         (2,788  )         1,200              (1,660   )
cash and cash
Cash and cash
equivalents at        1,770           3,056           268              1,928    
beginning of
Cash and cash
equivalents at       $ 1,468          $ 268            $ 1,468           $ 268      
end of period
disclosure of
cash flow
Cash paid
during the           $ 842             $ 1,241           $ 3,655            $ 6,099
period for
Net cash paid
during the           $ 608             $ 377             $ 1,104            $ (388     )
period for
income taxes

About Erickson Air-Crane Incorporated

Erickson Air-Crane specializes in the operation and manufacture of the
Erickson S-64 Aircrane (the “Aircrane”), a versatile and powerful heavy-lift
helicopter. The Aircrane has a lift capacity of up to 25,000 pounds and is the
only commercial aircraft built specifically as a flying crane without a
fuselage for internal loads. The Aircrane is also the only commercial
heavy-lift helicopter with a rear load-facing cockpit, combining an
unobstructed view and complete aircraft control for precision lift and load
placement capabilities. Erickson Air-Crane owns and operates a fleet of 18
Aircranes, which are used to support a wide variety of government and
commercial customers worldwide across a broad range of aerial services,
including firefighting, timber harvesting, infrastructure construction, and
crewing. Erickson Air-Crane also manufactures Aircranes and related components
for sale to government and commercial customers and provides aftermarket
support and maintenance, repair, and overhaul services for the Aircrane and
other aircraft. Founded in 1971, Erickson Air-Crane is headquartered in
Portland, Oregon with its principal manufacturing facility based in Central
Point, Oregon. For more information, please visit

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that are subject to
substantial risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in or suggested by the
forward-looking statements. You can identify forward-looking statements by
words such as “believe,” “may,” “estimate,” “continue,” “anticipate,”
“intend,” “plan,” “expect,” “predict,” “potential,” or the negative of these
terms or other comparable terminology. These forward-looking statements are
based on management's current expectations but they involve a number of risks
and uncertainties. Actual results and the timing of events could differ
materially from those anticipated in the forward-looking statements as a
result of risks and uncertainties, which include the possibility that we do
not complete the acquisition of the Brazilian air logistics business, or
realize the benefits of acquisitions, on a timely basis or at all, the ability
to integrate these businesses successfully or in a timely and cost-efficient
manner, the ability to successfully enter new markets and manage international
expansion, failure to obtain any required financing on favorable terms,
including the possibility that the commitment letter from Wells Fargo Bank
expires, our safety record, the hazards associated with operating Aircranes,
compliance with debt obligations, cancellations, reductions or delays in
customer orders, ability to collect on customer receivables, weather and
seasonal fluctuations that impact Aircrane activities, competition, reliance
on a small number of large customers, the impact of short-term contracts, the
availability and size of the Aircrane fleet, the ability to implement
production rate changes, the impact of government spending, the impact of
product liability and product warranties, the ability to attract and retain
qualified personnel, the impact of environmental regulations, the ability to
accurately forecast financial guidance, convert backlog into revenues, and
appropriately plan expenses, worldwide economic conditions (including
conditions in Greece and Italy), government regulation, ability to attract and
retain key personnel, reliance on a small number of manufacturers, the
necessity to provide components or services to owners and operators of
aircraft, effectively manage growth, keep pace with changes in technology,
adequately protect our intellectual property, successfully enter new markets,
manage international expansion, expand and diversify its customer base, expand
and market manufacturing and maintenance, repair and overhaul services, the
potential unionization of employees, the fluctuation in the price of fuel, the
ability to access public or private debt markets, the obligations of being a
new public company, the impact of equipment failures or other events impacting
the operation of our factories, and successfully manage any future
acquisitions, and other risks and uncertainties more fully described under the
heading “Risk Factors” in the Company’s most recently filed Annual Report on
Form 10K as well as the other reports Erickson Air-Crane has filed with the

You should not place undue reliance on any forward-looking statements.
Erickson Air-Crane assumes no obligation to update forward-looking statements
to reflect actual results, changes in assumptions, or changes in other factors
affecting forward-looking information, except to the extent required by
applicable laws.

Use of Non-GAAP Measures

The Company uses adjusted EBITDA (“Adjusted EBITDA”) in managing our business.
We define EBITDA as net income (loss) before interest expense, net, provision
for (benefit from) income taxes, and depreciation and amortization and the
adjustments to EBITDA to be non-cash unrealized mark-to-market foreign
exchange gains (losses), specified litigation expenses, certain management
fees, gains from sale of equipment, non-cash charges arising from awards to
employees relating to equity interests, non-cash charges relating to
financings, initial public offering-related non-capitalized expenses,
acquisition due diligence and transaction related expenses, and other unusual,
extraordinary, non-recurring non-cash costs. This is a financial measure not
prepared in accordance with accounting principles generally accepted in the
United States ("GAAP"). We have provided a reconciliation below of Adjusted
EBITDA to net income (loss), the most directly comparable GAAP financial
measure. Adjusted EBITDA should not be considered an alternative to revenue or
net income (loss) as a measure of operating performance, to cash flows from
operating activities as a measure of liquidity, or to any other measure of
financial performance presented in accordance with GAAP. We present Adjusted
EBITDA because we believe it is an important measure of our operating
performance and provides more comparability between our historical results by
taking into account our capital structure including (i) changes in our asset
base (depreciation and amortization) from acquisitions and from capital
expenditures, and (ii) changes in interest expense and amortization of
financing costs. Because not all companies use identical calculations, our
presentation of Adjusted EBITDA may not be comparable to similarly titled
measures of other companies.

                     Three          Three
                     Months         Months
                     Ended          Ended             Year             Year
                                                      Ended            Ended
                     December       December          December         December
                     31,            31,               31,              31,
                     2012           2011              2012             2011
Net income
attributable         (949   )       8,576             15,230           15,870
to Erickson
Interest             1,453          2,594             6,990            9,150
expense, net
Tax expense          45             (11,522 )         10,213           (4,926 )
Depreciation         2,682          1,699             8,976            7,300
of debt              322            322               1,174            875
issuance costs
charges from
awards to            389           -                2,118           -      
employees of
EBITDA               3,942         1,669            44,701          28,269 
mark-to-market       350            (358    )         322              (1,819 )
exchange gains
related to tax       -              (3,015  )         -                (2,745 )
Litigation           -              30                -                1,390
related              234            -                 242              -
Other noncash        5             (21     )         (795   ) (2)     (26    )
(gains) losses
Adjusted             4,531         (1,695  ) (1)     44,470          25,069  (1)

      As part of the amendments to our credit agreement on June 30, 2011, the
(1)  $10.0 million in new unsecured subordinated promissory notes are
      included, with limitation, as an addition to Adjusted EBITDA. Such
      amounts have been excluded from this table for presentation purposes.
      The $0.8 million relates to the removal of the Canadian Revenue
(2)   Authority reserve that was included as an addback for the fourth quarter
      2010 charges.


Erickson Air-Crane Incorporated
Dave Finnie, 503-505-5880
Senior Director, Finance and Business Operations
Investor Relations:
ICR, Inc.
James Palczynski, 203-682-8229
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