HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- Bristow Group Inc. today reported financial results for its fiscal 2010 second quarter ended September 30, 2009.
For the September 2009 quarter: -- Revenue was $291.6 million, which was substantially unchanged from September 2008 quarter revenue of $291.7 million and June 2009 quarter revenue of $290.5 million. -- Operating income was $53.6 million, an increase of 26% from the September 2008 quarter and 20% from the June 2009 quarter. -- Net income was $33.2 million, an increase of 21% from the September 2008 quarter and 40% from the June 2009 quarter. -- Diluted earnings per share was $0.92, an increase of $0.15 versus the September 2008 quarter and $0.26 versus the June 2009 quarter. -- Operating income, net income and diluted earnings per share were improved over the September 2008 quarter primarily as a result of: -- A $6.4 million increase in operating income in West Africa driven by increased rates and a favorable impact on our costs from a stronger U.S. dollar versus the British pound and Nigerian naira, -- An $8.1 million increase in operating income in Australia primarily resulting from two new large aircraft and reduced costs, -- The reversal of a $2.5 million bad debt reserve in Kazakhstan within our Other International business unit, and -- A $3.0 million increase in earnings from unconsolidated affiliates (primarily in Mexico and Brazil). -- These items were partially offset by reduced operating income in certain other business units, including Europe (which was reduced by a lower level of contractual escalations billings versus the September 2008 quarter and an unfavorable impact from a stronger U.S. dollar versus the British pound) and the U.S. Gulf of Mexico (which was reduced as a result of lower demand for services). Additionally, net income and diluted earnings per share were reduced by higher net interest expense, which increased $4.6 million due to reduced interest income and lower levels of capitalized interest. -- Net income and diluted earnings per share for the September 2009 quarter were also unfavorably impacted by a $2.1 million increase in our provision for income taxes ($0.06 per share) resulting from $2.0 million in tax contingency items and $0.1 million in changes in our expected foreign tax credit utilization. -- Operating income, net income and diluted earnings per share were improved over the June 2009 quarter primarily as a result of: -- The reversal of a $2.5 million bad debt reserve in Kazakhstan, -- A $5.1 million increase in operating income in Eastern Hemisphere Centralized Operations resulting from increased technical services revenue, changes to certain power-by-the-hour maintenance arrangements and reduced maintenance costs, -- A $3.0 million decrease in corporate general and administrative costs as the June 2009 quarter included costs associated with the separation between the Company and an executive officer, and -- A $2.3 million increase in earnings from unconsolidated affiliates (primarily in Mexico). -- These items were partially offset by reduced operating income in certain other business units, primarily in Europe where the June 2009 quarter included temporary work for a major customer, as well as a $1.1 million decrease in pre-tax gains on disposal of assets. Additionally, net income and diluted earnings per share were favorably impacted by an increase in foreign currency transaction and hedging gains totaling $3.3 million. For the six months ended September 30, 2009: -- Revenue was $582.1 million, an increase of 1% over the six months ended September 30, 2008. -- Operating income was $98.3 million, an increase of 20% from the six months ended September 30, 2008. -- Net income was $56.9 million, an increase of 14% from the six months ended September 30, 2008. -- Diluted earnings per share was $1.58, an increase of $0.09 versus the six months ended September 30, 2008. -- Operating income, net income and diluted earnings per share were improved over the six months ended September 30, 2008 primarily as a result of: -- A $14.2 million increase in operating income in West Africa driven by increased rates and a favorable impact on our costs from a stronger U.S. dollar versus the British pound and Nigerian naira, -- A $12.1 million increase in operating income in Australia primarily resulting from reduced costs, which were partially offset by a reduction in results associated with the strengthening U.S. dollar, -- The reversal of a $2.5 million bad debt reserve in Kazakhstan, and -- An increase in pre-tax gains on disposal of assets of $4.9 million. -- These items were partially offset by reduced operating income in certain other business units, including Europe (which was reduced by the impact of a stronger U.S. dollar versus the British pound) and the U.S. Gulf of Mexico (which was reduced as a result of lower demand for services). Additionally, net income and diluted earnings per share were reduced by higher net interest expense, which increased $7.2 million due to reduced interest income, increased interest expense from our issuance of $115 million of convertible senior notes in June 2008 and lower levels of capitalized interest. -- Our results for the six months ended September 30, 2009 were unfavorably impacted by the strengthening of the U.S. dollar versus other foreign currencies (primarily the British pound and Australian dollar), which resulted in a decrease in operating income of $2.8 million, net income of $3.5 million and diluted earnings per share of $0.10. These decreases are reflected in our results for Europe and Australia and in other income, net (driven by a decrease in foreign currency transaction gains, net of hedging impact), partially offset by an increase in results for West Africa. -- Net income and diluted earnings per share for the six months ended September 30, 2009 were also unfavorably impacted by a $4.3 million increase in our provision for income taxes ($0.12 per share) resulting from $3.3 million in tax contingency items and $1.0 million in changes in our expected foreign tax credit utilization. Capital and Liquidity -- At September 30, 2009, key balance sheet items, capital commitments and liquidity sources were: -- $1.3 billion in stockholders' investment and $718 million of indebtedness, -- $143 million in cash and a $100 million undrawn revolving credit facility, and -- $119 million in aircraft purchase commitments for 12 aircraft. -- Net cash generated by operating activities was $59 million and net cash used in investing activities was $43 million in the September 2009 quarter. CEO Remarks
"We continued to realize good operating results in Latin America, Nigeria and Australia during the second quarter," said William E. Chiles, President and Chief Executive Officer of Bristow Group.
"Our investment in Lider in Brazil early this year contributed to these positive results. In Nigeria, activity levels continue to be strong despite a challenging political environment, which included a union strike during the latest quarter. In Australia, our local team has come a long way in improving our overall operations and business activity level over the past year by winning new business from a number of customers and implementing cost cutting measures. We have added two new large and two new medium aircraft to the Australian market over the last 12 months.
"Our operating results in the North Sea continue to be impacted by lower margins from Norway as we integrate that business into our Europe operations. Our operating results for the U.S. Gulf of Mexico were slightly reduced from the June quarter, but were not impacted to as large a degree as other offshore service companies. This is the result of our efforts to maintain stable pricing and to upgrade our fleet to larger, more efficient and more profitable aircraft serving larger projects farther offshore in deeper water.
"We continue to operate in a challenging economic and industry environment with significant volatility in energy prices. However, our business model, with greater reliance on our customers' operating expenditures rather than capital expenditures, should continue to translate into better performance by our business. In addition, we believe we are well positioned with adequate liquidity and the financial flexibility to weather this uncertain market and benefit from a turnaround that we expect to see next year," Chiles added.
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. EST (9:00 a.m. CST) on Thursday, November 5, 2009, to review financial results for the September 2009 quarter. The conference call can be accessed as follows:
Via Webcast: -- Visit Bristow Group's investor relations Web page at http://www.bristowgroup.com/ -- Live: Click on the link for "Bristow Group Fiscal 2010 Second Quarter Earnings Conference Call" -- Replay: A replay via webcast will be available approximately one hour after the call's completion and will be accessible for approximately 90 days Via Telephone within the U.S.: -- Live: Dial toll free (800) 762-8973 -- Replay: A telephone replay will be available through November 19, 2009 and may be accessed by calling toll free (800) 406-7325, passcode: 4175233# Via Telephone outside the U.S.: -- Live: Dial (480) 629-9870 -- Replay: A telephone replay will be available through November 19, 2009 and may be accessed by calling (303) 590-3030, passcode: 4175233# ABOUT BRISTOW GROUP INC.
Bristow Group Inc. is a leading provider of helicopter services to the worldwide offshore energy industry. Through its subsidiaries, affiliates and joint ventures, the Company has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Brazil, Mexico, Russia and Trinidad. For more information, visit the Company's website at http://www.bristowgroup.com/.
FORWARD-LOOKING STATEMENTS DISCLOSURE
Statements contained in this news release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding the impact of activity levels, commodity prices, business performance, turnaround timing, market conditions, liquidity and financial flexibility. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2009 and annual report on Form 10-K for the fiscal year ended March 31, 2009. Bristow Group Inc. disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.
Linda McNeill, Investor Relations (713) 267-7622 (financial tables follow) BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended --------------------------- ---------------- September 30, June 30, September 30, --------------- -------------- 2009 2008 2009 2009 2008 ---- ---- ---- ---- ---- Gross revenue: Operating revenue from non-affiliates $247,642 $248,526 $248,891 $496,533 $489,660 Operating revenue from affiliates 17,460 18,430 14,602 32,062 35,700 Reimbursable revenue from non-affiliates 24,746 23,208 25,853 50,599 47,579 Reimbursable revenue from affiliates 1,767 1,524 1,106 2,873 2,872 ----- ----- ----- ----- ----- 291,615 291,688 290,452 582,067 575,811 ------- ------- ------- ------- ------- Operating expense: Direct cost 173,392 188,393 180,677 354,069 375,366 Reimbursable expense 26,304 24,681 26,657 52,961 50,748 Depreciation and amortization 18,470 15,485 18,186 36,656 30,440 General and administrative 29,686 25,984 28,802 58,488 53,190 ------ ------ ------ ------ ------ 247,852 254,543 254,322 502,174 509,744 ------- ------- ------- ------- ------- Gain on disposal of assets 4,880 3,302 6,009 10,889 5,967 Earnings from unconsolidated affiliates, net of losses 4,924 1,971 2,633 7,557 9,694 ----- ----- ----- ----- ----- Operating Income 53,567 42,418 44,772 98,339 81,728 Interest income 210 3,205 222 432 4,652 Interest expense (10,640) (9,065) (10,012) (20,652) (17,667) Other income (expense), net 1,809 2,070 (1,481) 328 3,762 ----- ----- ------ --- ----- Income before provision for income taxes 44,946 38,628 33,501 78,447 72,475 Provision for income taxes (11,236) (10,069) (9,510) (20,746) (20,633) ------- ------- ------ ------- ------- Net income from continuing operations 33,710 28,559 23,991 57,701 51,842 Loss from discontinued operations, - (246) - - (246) net of tax --- ---- --- --- ---- Net income 33,710 28,313 23,991 57,701 51,596 Net income attributable to noncontrolling interests (540) (952) (268) (808) (1,655) ---- ---- ---- ---- ------ Net income attributable to Bristow 33,170 27,361 23,723 56,893 49,941 Preferred stock dividends (3,163) (3,163) (3,162) (6,325) (6,325) ------ ------ ------ ------ ------ Net income available to common stockholders $30,007 $24,198 $20,561 $50,568 $43,616 ======= ======= ======= ======= ======= Basic earnings per common share: Earnings from continued operations $0.98 $0.84 $0.71 $1.70 $1.63 Loss from discontinued operations - (0.01) - - (0.01) --- ----- --- --- ----- Net earnings $0.98 $0.83 $0.71 $1.70 $1.62 ===== ===== ===== ===== ===== Diluted earnings per common share: Earnings from continued operations $0.92 $0.77 $0.66 $1.58 $1.50 Loss from discontinued operations - - - - (0.01) --- --- --- --- ----- Net earnings $0.92 $0.77 $0.66 $1.58 $1.49 ===== ===== ===== ===== ===== Weighted average number of common shares outstanding: Basic 30,491 29,085 29,133 29,731 26,941 Diluted 36,101 35,636 35,782 35,907 33,487 BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) September 30, March 31, 2009 2009 ---- ---- (Unaudited) ASSETS Current assets: Cash and cash equivalents $143,205 $300,969 Accounts receivable from non-affiliates 199,648 194,030 Accounts receivable from affiliates 29,539 22,644 Inventories 188,181 165,438 Prepaid expenses and other current assets 39,437 20,226 ------ ------ Total current assets 600,010 703,307 Investment in unconsolidated affiliates 204,457 20,265 Property and equipment - at cost: Land and buildings 82,783 68,961 Aircraft and equipment 1,892,662 1,823,011 --------- --------- 1,975,445 1,891,972 Less - Accumulated depreciation and amortization (375,011) (350,515) -------- -------- 1,600,434 1,541,457 Goodwill 46,800 44,654 Other assets 24,689 24,888 ------ ------ $2,476,390 $2,334,571 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable $54,089 $44,892 Accrued wages, benefits and related taxes 33,464 39,939 Income taxes payable 933 - Other accrued taxes 3,794 3,357 Deferred revenues 18,551 17,593 Accrued maintenance and repairs 13,316 10,317 Accrued interest 6,430 6,434 Other accrued liabilities 16,845 20,164 Deferred taxes 10,526 6,195 Short-term borrowings and current maturities of long-term debt 7,918 8,948 ----- ----- Total current liabilities 165,866 157,839 Long-term debt, less current maturities 709,843 714,965 Accrued pension liabilities 97,833 81,380 Other liabilities and deferred credits 19,856 16,741 Deferred taxes 142,666 127,266 Stockholders' investment: 5.50% mandatory convertible preferred stock - 222,554 Common stock 359 291 Additional paid-in capital 665,789 436,296 Retained earnings 769,061 718,493 Noncontrolling interests 9,810 11,200 Accumulated other comprehensive loss (104,693) (152,454) -------- -------- 1,340,326 1,236,380 --------- --------- $2,476,390 $2,334,571 ========== ========== BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended September 30, -------------------- 2009 2008 ---- ---- Cash flows from operating activities: Net income $57,701 $51,596 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 36,656 30,440 Deferred income taxes 13,340 7,133 Loss on disposal of discontinued operations - 379 Discount amortization on long-term debt 1,462 803 Gain on asset dispositions (10,889) (5,967) Gain on Heliservicio investment sale - (1,438) Stock-based compensation expense 6,611 4,881 Equity in earnings from unconsolidated affiliates (in excess of) below dividends received (3,846) 4,499 Tax benefit related to stock-based compensation (433) (231) Increase (decrease) in cash resulting from changes in: Accounts receivable 13,707 (11,425) Inventories (13,243) (10,643) Prepaid expenses and other assets (10,391) (2,699) Accounts payable 2,528 (5,234) Accrued liabilities (10,303) (2,420) Other liabilities and deferred credits 10,709 (4,205) Net cash provided by operating activities 93,609 55,469 Cash flows from investing activities: Capital expenditures (136,145) (278,543) Proceeds from asset dispositions 71,238 17,322 Acquisitions, net of cash received (178,961) 356 Net cash used in investing activities (243,868) (260,865) Cash flows from financing activities: Proceeds from borrowings - 115,000 Debt issuance costs - (3,768) Repayment of debt and debt redemption premiums (8,858) (3,967) Partial prepayment of put/call obligation (37) (82) Preferred stock dividends paid (6,325) (6,325) Issuance of common stock 1,089 225,099 Tax benefit related to stock-based compensation 433 231 --- --- Net cash provided by (used in) financing activities (13,698) 326,188 Effect of exchange rate changes on cash and cash equivalents 6,193 (11,787) ----- ------- Net increase (decrease) in cash and cash equivalents (157,764) 109,005 Cash and cash equivalents at beginning of period 300,969 290,050 ------- ------- Cash and cash equivalents at end of period $143,205 $399,055 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $22,707 $21,094 Income taxes $7,966 $19,628 Non-cash investing activities: Contribution of note receivable and aircraft to RLR $- $(6,551) Aircraft received for investment in Heliservicio $- $2,410 BRISTOW GROUP INC. AND SUBSIDIARIES SELECTED OPERATING DATA (In thousands, except flight hours and percentages) (Unaudited) Three Months Ended Six Months Ended ------------------------------ ---------------- September 30, June 30, September 30, ------------------ ---------------- 2009 2008 2009 2009 2008 ---- ---- ---- ---- ---- Flight hours (excludes Bristow Academy and unconsolidated affiliates): U.S. Gulf of Mexico 18,372 34,891 19,769 38,141 72,530 Arctic 2,843 3,695 2,348 5,191 6,132 Latin America 9,228 9,595 8,632 17,860 18,134 Europe 14,242 10,265 14,855 29,097 20,571 West Africa 8,470 9,647 8,950 17,420 19,245 Australia 2,794 3,813 2,880 5,674 7,853 Other International 2,582 2,851 2,493 5,075 5,746 ----- ----- ----- ----- ----- Consolidated total 58,531 74,757 59,927 118,458 150,211 ====== ====== ====== ======= ======= Gross revenue: U.S. Gulf of Mexico $42,614 $62,491 $45,461 $88,075 $124,000 Arctic 6,123 6,840 4,395 10,518 11,083 Latin America 20,786 19,051 19,559 40,345 39,257 WH Centralized Operations 791 2,909 1,485 2,276 5,169 Europe 113,890 98,303 115,043 228,933 193,733 West Africa 51,452 47,010 54,817 106,269 90,310 Australia 30,333 29,226 28,163 58,496 62,339 Other International 16,221 18,370 13,435 29,656 35,158 EH Centralized Operations 4,559 4,057 3,659 8,218 6,372 Bristow Academy 7,151 5,572 7,293 14,444 11,723 Intrasegment eliminations (2,303) (2,137) (2,860) (5,163) (3,361) Corporate (2) (4) 2 - 28 --- --- --- --- --- Consolidated total $291,615 $291,688 $290,452 $582,067 $575,811 ======== ======== ======== ======== ======== Operating income (loss): U.S. Gulf of Mexico $5,509 $8,263 $6,240 $11,749 $16,252 Arctic 2,085 1,900 605 2,690 2,419 Latin America 7,314 3,973 4,779 12,093 13,674 WH Centralized Operations (4,156) 904 (3,209) (7,365) 228 Europe 14,172 22,211 18,778 32,950 41,677 West Africa 14,466 8,024 14,238 28,704 14,540 Australia 6,869 (1,218) 6,175 13,044 927 Other International 6,611 3,945 3,287 9,898 7,243 EH Centralized Operations 2,247 (2,243) (2,893) (646) (7,665) Bristow Academy 723 (159) 931 1,654 387 Gain on disposal of assets 4,880 3,302 6,009 10,889 5,967 Corporate (7,153) (6,484) (10,168) (17,321) (13,921) ------ ------ ------- ------- ------- Consolidated total $53,567 $42,418 $44,772 $98,339 $81,728 ======= ======= ======= ======= ======= Operating margin: U.S. Gulf of Mexico 12.9% 13.2% 13.7% 13.3% 13.1% Arctic 34.1% 27.8% 13.8% 25.6% 21.8% Latin America 35.2% 20.9% 24.4% 30.0% 34.8% Europe 12.4% 22.6% 16.3% 14.4% 21.5% West Africa 28.1% 17.1% 26.0% 27.0% 16.1% Australia 22.6% (4.2)% 21.9% 22.3% 1.5% Other International 40.8% 21.5% 24.5% 33.4% 20.6% Bristow Academy 10.1% (2.9)% 12.8% 11.5% 3.3% Consolidated total 18.4% 14.5% 15.4% 16.9% 14.2% BRISTOW GROUP INC. AND SUBSIDIARIES AIRCRAFT COUNT AS OF SEPTEMBER 30, 2009 Aircraft in Consolidated Fleet ----------------------------------------- Helicopters --------------------------- Fixed Unconsolidated Small Medium Large Training Wing Total(1) Affiliates(2) Total ----- ------ ----- -------- ----- -------- ------------- ----- U.S. Gulf of Mexico 61 26 7 - - 94 - 94 Arctic 13 2 - - 1 16 - 16 Latin America 5 31 2 - - 38 93 131 Europe - 11 40 - - 51 - 51 West Africa 12 31 5 - 4 52 - 52 Australia 2 10 17 - - 29 - 29 Other International - 12 10 - - 22 41 63 EH Centralized Operations - - - - - - 63 63 Bristow Academy - - - 75 1 76 - 76 --- --- --- --- --- --- --- --- Total 93 123 81 75 6 378 197 575 === === === === === === === === Aircraft not currently in fleet: (3) On order - 7 5 - - 12 Under option 1 27 19 - - 47 --------------- (1) Includes 13 aircraft held for sale. (2) The 197 aircraft operated or managed by our unconsolidated affiliates are in addition to those aircraft leased from us. (3) This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.
Bristow Group Inc.
CONTACT: Linda McNeill, Investor Relations of Bristow Group Inc.,
+1-713-267-7622
Web Site: http://www.bristowgroup.com/
