Era Group Inc. (NYSE:ERA) Q3 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 10:00 am ET


Era Group Inc. (NYSE:ERA) Q3 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to the Era Group Reports Q3 2019 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Crystal Gordon, SVP and General Counsel. Please go ahead.

Crystal Gordon

Thank you, Casey, and good morning, everyone. Welcome to Era's third quarter 2019 earnings call. I am here today with our President and CEO, Chris Bradshaw; our Senior Vice President and CFO, Jennifer Whalen; and our Senior Vice President, Grant Newman; Stuart Stavley; and Paul White as well as our Corporate Controller, Tricia Schroeder; and our Finance Director, Seema Parekh. You may access our recent earnings press release and presentation slides on our website,

Let me remind everyone that during the call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on Slide 3 of the earnings presentation.

I'll now turn the call over to our President and CEO. Chris?

Christopher S. Bradshaw

Thank you, Crystal, and welcome to the call, everyone. As always, I will begin our prepared remarks with a note on safety, which is Era's most important core value and our highest operational priority. We are pleased to report that Era achieved our dual goals of zero air accidents and zero recordable workplace incidents year-to-date 2019. The company has not experienced an air accident in the last three years, and we have now gone over 770 consecutive days without a recordable workplace incident. I want to thank and commend all of the hard-working Era team members for their focus and dedication to achieve this world-class safety performance.

Turning to an update on our financial position. We have continued to strengthen Era's already strong balance sheet and industry-leading financial flexibility. As of quarter end, Era's total liquidity was approximately $232 million including $108 million of cash on hand. Our net debt balance was just $55 million, which is an 80% reduction from when the industry downturn began in late 2014. During Q3, 2019, we generated approximately $17 million of free cash flow, increasing Era's year-to-date free cash flow total to $24 million.

With a strong balance sheet, limited near-term debt maturities, manageable fixed charge obligations and a flexible order book, Era remains well positioned for positive free cash flow generation.

I will now turn it over to our CFO for a review of Q3 financial results. Jennifer?

Jennifer Whalen

Thank you, Chris. EBITDA adjusted to exclude asset dispositions and special items was $9.5 million for the third quarter of 2019 compared to $8 million in the second quarter of 2019. Contributing to this $1.5 million increase in EBITDA was a $3.4 million increase in revenues due to higher utilization of helicopters in our U.S. oil and gas business. Operating expenses were higher by $0.7 million due to increased personnel, insurance and fuel costs, partially offset by lower repairs and maintenance expenses. EBITDA in Q3 was negatively impacted by foreign currency losses of $0.7 million due to the strengthening of the U.S. dollar relative to the Brazilian real.