Era Group Inc. (ERA) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $0.56 million, or $ 0.03 a share in the quarter, against a net profit of $0.86 million, or $0.04 a share in the last year period.
Revenue during the quarter dropped 6.79 percent to $65.01 million from $69.74 million in the previous year period. Total expenses were 96.36 percent of quarterly revenues, up from 92.65 percent for the same period last year. That has resulted in a contraction of 371 basis points in operating margin to 3.64 percent.
Operating income for the quarter was $2.37 million, compared with $5.12 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $15.32 million compared with $17.09 million in the prior year period. At the same time, adjusted EBITDA margin contracted 93 basis points in the quarter to 23.57 percent from 24.50 percent in the last year period.
"Given the uncertainty regarding the timing of a recovery in offshore helicopter demand, we worked closely with our bank group to amend our credit facility to ensure that we continue to have access to ample liquidity for the duration of the downturn," said Chris Bradshaw, president and chief executive officer of Era Group Inc. "We generated $18 million of cash flows from operations in the third quarter, and we continued to strengthen our balance sheet by paying down $20 million of debt. At the same time, we believe we are making prudent investments to improve our competitive position for the eventual recovery. The combination of our helicopter deliveries and divestitures will allow us to continue to upgrade and diversify our fleet with negligible, if any, incremental cash expenditure."
Working capital increases sharply
Era Group Inc. has recorded an increase in the working capital over the last year. It stood at $71.55 million as at Sep. 30, 2016, up 165.67 percent or $44.62 million from $26.93 million on Sep. 30, 2015. Current ratio was at 3.39 as on Sep. 30, 2016, up from 1.44 on Sep. 30, 2015.
Days sales outstanding went up to 59 days for the quarter compared with 55 days for the same period last year.
Debt comes down
Era Group Inc. has recorded a decline in total debt over the last one year. It stood at $234.19 million as on Sep. 30, 2016, down 11.57 percent or $30.66 million from $264.85 million on Sep. 30, 2015. Total debt was 24.11 percent of total assets as on Sep. 30, 2016, compared with 26.52 percent on Sep. 30, 2015. Debt to equity ratio was at 0.50 as on Sep. 30, 2016, down from 0.56 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.59 for the quarter from 1.64 for the same period last year.
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