Evergreen Helicopters, Inc. ("EHI"), a wholly owned subsidiary
Erickson Air-Crane Inc.
), has purchased five aircrafts worth $10.1 million from a third
party, which were earlier hired under lease. These aircrafts
comprise of two Bell 214STs, two Beechcraft 1900Ds and one Casa
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Post-purchase there was no change to the company's fleet size. It
remained at 85 aircrafts, which is a combination of 35 leased and
50 owned aircraft. Besides adding to the asset collateral base,
the transaction would eliminate $3.0 million of annual lease
expense and $12.2 million of total future lease obligations.
Recently, the company posted first quarter 2013 results with
earnings and revenues above the Zacks Consensus Estimate. The
top-line increase was driven by solid growth in Erickson's
infrastructure construction operation, mainly in the oil and gas
As of Mar 31, 2013, Erickson had cash and cash equivalents of
approximately $1.3 million. The company seems to be well
utilizing its liquidity position. Recently, the company completed
the acquisition of EHI from Evergreen International Aviation,
Inc. The transaction payment comprises of $185 million cash,
$17.5 million in unsecured promissory notes issued by Erickson
Air-Crane and approximately four million convertible preferred
shares of Erickson Air-Crane based on an agreed value of $11.85
per share worth $47.5 million. EHI operates a fleet of 65
aircraft of varying rotary-wing and fixed-wing types for a wide
range of passenger transport and light, medium and heavy
load-carrying missions. Moreover, EHI maintains a global presence
with operations in North America, the Middle East, Africa, and
Erickson is also set to acquire the Air Amazonia fleet and
operations from HRT Oil & Gas. Besides adding to the product
portfolio, these acquisitions will allow Erickson to emerge as a
highly diversified, global company with opportunities to generate
high-margin growth. The company presently retains a short-term
Zacks Rank #1 (Strong Buy).
Other stocks that can also be taken into consideration are
Northrop Grumman Corporation
Wesco Aircraft Holdings, Inc.
B/E Aerospace Inc.
), all with a Zacks Rank #2 (Buy).