Oregon-based Erickson Inc. (NASDAQ: EAC), a leading global provider of aviation services, said it hired Los Angeles-based investment banking firm Imperial Capital to explore strategic alternatives for the company.
“We are delighted to partner with a firm as reputable and experienced as Imperial Capital as we broaden Erickson’s financial capability,” said Erickson’s president and CEO Jeff Roberts.
“If you need a safe and self reliant utility aircraft company with light, medium, and heavy-lift capability — and you need to be able to work in austere environments anywhere on earth, at any time — you’ve got Erickson,” the company boasts on its website. “Erickson sets the standard for operational readiness and capability with a 97% ORR.”
By late morning, Erickson’s shares fell more than 17% to $0.87, reflecting a total market value for the company of roughly $12 million, and an enterprise value of nearly $487 million. The shares were trading at nearly $5 about a year ago (closing at $4.86 per share on June 24, 2015), and have been falling gradually ever since.
In April 2012, the company priced its IPO on NASDAQ at $8.00 per share, and raised $38.4 million.
Two days earlier the stock had doubled in value after the company said it won two contracts valued at $70 million, for the provision of “vertical replenishment and other rotary-wing logistic services to Military Sealift Command for support of the United States Navy’s 5th and 7th Fleets.”
“Both contracts were awarded in February 2016,” but “Erickson chose to delay the announcement until resolution of protests filed with the Government Accountability Office,” the company said in a statement.
Erickson recorded net revenue of $46.8 million for the first quarter of 2016, compared to net revenue of $66.2 million for the first quarter of 2015. First quarter 2016 adjusted EBITDA was a loss of $3.1 million compared to adjusted EBITDA of $2.2 million for the same period in 2015.
Erickson reported long term debt of $467 million as of the end of the first quarter. Yesterday, the company announced that David W. Lancelot, a debt financing and restructuring specialist, will be joining its management team as CFO.
Erickson provides aviation services to commercial and governmental entities worldwide. The company operates through three distinct segments: Commercial Aviation Services; Global Defense and Security; and Manufacturing and MRO – Maintenance, Repair and Overhaul.
It owns and operates a fleet of aircraft; and provides a range of aerial services, including critical supply and logistics for deployed military forces, humanitarian relief, firefighting, timber harvesting, infrastructure construction, and crewing.
It also manufactures air-crane and related components; and offers aftermarket support services, as well as maintenance, repair, and overhaul services for the air-crane and other aircraft. In addition, the company leases aircrafts for specific missions.
As of December 31, 2015, the company had a fleet of 74 aircraft consisting of 20 heavy lift helicopters; 47 rotor-wing aircraft; and 7 fixed-wing aircraft.
The company was formerly known as Erickson Air-Crane Inc. and changed its name to Erickson Inc. in April 2014. Erickson was founded in 1971, it has more than 800 employees, and is headquartered in Portland, Oregon.
The new Erickson of today is primarily comprised of two Oregon legacy aviation giants—Evergreen Aviation (McMinnville, Oregon) and Erickson Aviation (Central Point/Medford, Oregon). The companies were led and founded by two remarkable Oregonians with memorable personalities, but very different in approach and style.
The Erickson Story
Jack Erickson founded Erickson in 1971 with a focus on logging that evolved to an eventually much bigger market of firefighting. The Erickson reputation for trustworthiness and toughness was built on the hard work of men and women from southwest Oregon in the Central Point/Medford area and the iconic Sikorsky S-64, a giant in the aircraft industry. The blazing orange “Air-cranes” are viewed as beacons of hope in the midst of boiling wildfires, and the Air-crane named “Elvis” is revered in Australia for having saved several firefighters’ lives. Given the heavy lift capabilities of the Air-crane, and the thinking that goes into complex project troubleshooting, Erickson’s earnest employees claim, “If we can’t do it, it can’t be done,” the company says on its website.
Del Smith founded Evergreen Aviation in 1960 and earned his stripes establishing a legacy of extensive contacts within the Department of Defense for missions in service to the United States for nearly 50 years. His leadership within the aviation world was broadly recognized and he built a world class aviation and space museum that features iconic aircraft starting with the Wright Brother’s early flight models and the museums draw nearly a million visitors every year. The breadth of his collection is testament to his broad circle of influence in the aerospace industry and devotion to promoting flight. Unfortunately, the company faced struggles with waning contracts and a diminishing reputation, but many of the talented employees and workhorse aircraft were acquired by Erickson Inc. in 2013.
Erickson Air-Crane, Inc. was founded in 2007, with the intent to build and grow a global helicopter aerial service provider, the company says. The initial group of investors saw the concept of “the whole is greater than the sum of its parts.” Understanding that bringing two specialty companies—and acquiring the Oil and Gas expertise of Brazilian-based Air Amazonia in 2013—has created an organizational opportunity to be a full-services provider for firefighting, government services, and commercial services such as oil and gas, construction, and special project work. Jeff Roberts began his tenure as Erickson’s President and CEO in April of 2015.