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Bristow Group Reports Financial Results for the Fiscal Year 2009 Fourth Quarter and Year-Ended March 31, 2009

Posted on: Thursday, 21 May 2009, 05:58 CDT

HOUSTON, May 21 /PRNewswire-FirstCall/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for the fiscal year 2009 fourth quarter and year-ended March 31, 2009.

Highlights include:

For the March 2009 quarter:

• Revenue increased 6% versus the March 2008 quarter to $275.0 million. Revenue improvements occurred across most of our business units, but most significantly in our Europe, West Africa and Latin America business units. These were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Bristow Norway (formerly Norsk Helikopters AS), our Norwegian affiliate, effective October 31, 2008.
• Operating income increased 28% to $42.9 million from $33.5 million in the March 2008 quarter.
• Income from continuing operations was unchanged at $26.3 million for the March 2009 and 2008 quarters.
• Diluted earnings per share from continuing operations decreased to $0.74 from $0.86 in the March 2008 quarter. Diluted earnings per share for the March 2009 and 2008 quarters reflect the assumed conversion of our Mandatory Convertible Preferred Stock, which will convert to our common shares in September 2009 and added approximately 6.5 million shares to our weighted-average share count in both quarters. Primarily as a result of our June 2008 offering, the weighted-average share count rose by 17% in the March 2009 quarter compared to the same period a year ago.
• Our results for the March 2009 quarter were unfavorably impacted by the strengthening U.S. dollar versus certain foreign currencies. The changes in foreign currency exchange rates resulted in a decrease in our operating income of $6.3 million, income from continuing operations of $4.9 million and diluted earnings per share of $0.14. Excluding the impact of changes in foreign currency exchange rates, diluted earnings per share from continuing operations would have been $0.88 for the March 2009 quarter.
• The March 2009 quarter also included the following significant items:
  • The net reduction in expense in Australia, part of our Southeast Asia business unit, upon resolution of a local tax matter, which was partially offset by expense recorded for other local tax matters. These items collectively resulted in an increase in operating income of $1.3 million, income from continuing operations of $0.8 million and diluted earnings per share of $0.02.
  • A reduction in maintenance expense in our Eastern Hemisphere ("EH") Centralized Operations business unit associated with a credit resulting from the renegotiation of a "power by the hour" (PBH) contract for aircraft maintenance with a third party provider, which increased operating income by $6.8 million, income from continuing operations by $4.4 million and diluted earnings per share by $0.12.
  • An increase in our overall effective tax rate to 35.0% resulting from a one time provision for potential foreign taxes and a settlement of tax contingencies related to certain foreign income taxes, which decreased income from continuing operations by $4.7 million and diluted earnings per share by $0.13.
• Excluding the impact of these significant items, diluted earnings per share from continuing operations would have been $0.73 for the March 2009 quarter.
• Financial results for the March 2008 quarter included:
  • Costs in our Other International business unit related to a claim by a former agent, whom we terminated in connection with an internal review, that decreased operating income by $4.5 million, income from continuing operations by $2.9 million and diluted earnings per share by $0.10.
  • A $4.5 million decrease in equity in earnings of Bristow Norway. The lower level of equity earnings from Bristow Norway decreased income from continuing operations by $2.9 million and diluted earnings per share by $0.10.
  • Retirement related expenses for two of our corporate officers that decreased operating income by $1.9 million, income from continuing operations by $1.2 million and diluted earnings per share by $0.04.
  • Tax items that increased operating income by $2.9 million, income from continuing operations by $7.9 million and diluted earnings per share by $0.26.
• Excluding these items, diluted earnings per share from continuing operations would have been $0.84 for the March 2008 quarter.

For the fiscal year ended March 31, 2009:

• Revenue increased 12% versus the fiscal year ended March 31, 2008 to $1.1 billion. Revenue increased for all of our business units, but most significantly in our Europe, West Africa, Southeast Asia and Latin America business units. These revenue increases were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Bristow Norway.
• Operating income increased 27% to $188.6 million from $148.7 million for the prior fiscal year.
• Income from continuing operations increased 16% to $124.6 million from $107.8 million for the prior fiscal year.
• Diluted earnings per share from continuing operations increased to $3.61 from $3.53 a year ago. Diluted earnings per share for the fiscal years ended March 31, 2009 and 2008 reflect the assumed conversion of our Mandatory Convertible Preferred Stock, which will convert to our common shares in September 2009 and added approximately 6.5 million shares to our weighted-average share count in both fiscal years. Primarily as a result of our June 2008 offering, the weighted-average share count rose by 13% in the fiscal year ended March 31, 2009 compared to the prior fiscal year.
• As was the case for the March 2009 quarter, results for the fiscal year ended March 31, 2009 were unfavorably impacted by the strengthening U.S. dollar. The changes in foreign currency exchange rates resulted in a decrease in our operating income of $12.0 million, income from continuing operations of $9.2 million and diluted earnings per share of $0.27. Excluding the impact of changes in foreign currency exchange rates, diluted earnings per share from continuing operations would have been $3.88 for the fiscal year ended March 31, 2009.
• The fiscal year ended March 31, 2009 also included the following significant items:
  • The gain on the sale of 53 small aircraft, related inventory, spare parts and offshore fuel equipment in the U.S. Gulf of Mexico (the "GOM Asset Sale") on October 30, 2008, which increased operating income by $36.2 million, income from continuing operations by $23.4 million and diluted earnings per share by $0.68.
  • The impact of hurricanes in the U.S. Gulf of Mexico during the fiscal year ended March 31, 2009, which resulted in a decrease in flight activity and an increase in costs, which reduced operating income by $2.4 million, income from continuing operations by $2.0 million and diluted earnings per share by $0.06.
  • The April 2008 restructuring of our ownership interests in affiliates in Mexico, part of our Latin America business unit, which resulted in an increase in operating income of $0.8 million, income from continuing operations of $3.7 million and diluted earnings per share of $0.11.
  • The recognition of expense in Australia, part of our Southeast Asia business unit, related to local tax matters, increases in compensation costs retroactive to prior fiscal years and one time costs associated with introducing new aircraft into this market and moving aircraft within this market, which resulted in a reduction in operating income of $4.1 million, income from continuing operations of $2.9 million and diluted earnings per share of $0.08.
  • A reduction in maintenance expense in our EH Centralized Operations business unit associated with the PBH contract credit mentioned above, which increased operating income by $6.8 million, income from continuing operations by $4.8 million and diluted earnings per share by $0.14.
• Excluding the impact of these significant items, diluted earnings per share from continuing operations would have been $2.82 for the fiscal year ended March 31, 2009.
• In addition to the costs associated with termination of an agent and retirement of two of our corporate officers discussed above, financial results for the fiscal year ended March 31, 2008 included tax items that increased operating income by $8.3 million, income from continuing operations by $11.4 million and diluted earnings per share by $0.37.
• Excluding these items, diluted earnings per share from continuing operations would have been $3.31 for the fiscal year ended March 31, 2008.

Capital and Liquidity

• At March 31, 2009, key balance sheet items and capital commitments were:
  • $1.2 billion in stockholders' investment and $746 million of indebtedness,
  • $301 million in cash and a $100 million undrawn revolving credit facility, and
  • Aircraft purchase commitments totaled $245 million for 24 aircraft.
• During the fiscal year ended March 31, 2009, key cash flow items were:
  • $128 million of cash from operating activities,
  • $102 million of proceeds from sales of assets, including the GOM Asset Sale,
  • $336 million in net proceeds from the sale of convertible senior notes and common stock, and
  • $455 million used on capital expenditures - primarily for aircraft - and $17 million for acquisitions.

CEO Remarks

"We are pleased with both our fiscal fourth quarter and year-end results. Despite the challenging economic environment throughout the year, and the significant decline in energy prices during the second half, 2009 was a record year for Bristow in terms of revenue and net income. In the fourth quarter, we continued to experience good activity levels, particularly in Nigeria, the North Sea, Mexico and Brazil. This was driven by stable pricing and the continued upgrade of our fleet to larger, more efficient and more profitable aircraft," said William E. Chiles, President and Chief Executive Officer of Bristow Group Inc.

"The demand for our services has been negatively affected by lower E&P spending, but we are less affected than other oil service companies because of our production focus, fleet size and our geographic and customer diversity. To date we've been able to maintain our pricing structure in this challenging environment.

"We believe we have the liquidity and financial flexibility to weather this uncertain operating environment and the ability to take advantage of attractive investment opportunities which may arise," Chiles concluded.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EDT (9:00 a.m. CDT) on Thursday, May 21, 2009, to review financial results for the March 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 2009 Fourth 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 (877) 941-2332
• Replay: A telephone replay will be available through June 4, 2009 and may be accessed by calling toll free (800) 406-7325, passcode: 4072528#

Via Telephone outside the U.S.:

• Live: Dial (480) 629-9723
• Replay: A telephone replay will be available through June 4, 2009 and may be accessed by calling (303) 590-3030, passcode: 4072528#

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 significant operations in most major offshore oil and gas producing regions of the world, including the North Sea, the U.S. Gulf of Mexico, Nigeria, Australia and Latin America. For more information, visit the Company's website at 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, customer demand, future operations, future liquidity and growth plans and opportunities. 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 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.

BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Three Months Ended Twelve Months Ended March 31, March 31, ------------------ -------------------- 2008 2009 2008 2009 ------- ------- ------- -------- (Unaudited) Gross revenue: Operating revenue from non-affiliates $226,331 $237,909 $868,929 $964,060 Operating revenue from affiliates 11,218 12,412 49,806 64,904 Reimbursable revenue from non-affiliates 21,250 23,412 87,325 99,608 Reimbursable revenue from affiliates 1,486 1,272 6,704 5,231 -------- -------- --------- --------- 260,285 275,005 1,012,764 1,133,803 -------- -------- --------- --------- Operating expense: Direct cost 159,911 166,971 635,327 718,375 Reimbursable expense 22,519 23,550 91,106 102,987 Depreciation and amortization 18,013 18,411 54,140 65,514 General and administrative 31,815 24,880 92,833 103,656 Gain on GOM Asset Sale - 1,564 - (36,216) (Gain) loss on disposal of other assets (5,469) (3,224) (9,390) (9,089) -------- -------- --------- --------- 226,789 232,152 864,016 945,227 -------- -------- --------- --------- Operating income 33,496 42,853 148,748 188,576 Earnings from unconsolidated affiliates, net of losses 1,745 4,947 12,978 13,224 Interest income 2,944 265 12,725 6,004 Interest expense (7,644) (8,522) (23,779) (33,022) Other income (expense), net (190) 1,128 1,585 3,368 -------- -------- --------- --------- Income from continuing operations before provision for income taxes and minority interest 30,351 40,671 152,257 178,150 Provision for income taxes (4,491) (14,249) (44,526) (51,269) Minority interest 475 (137) 83 (2,327) -------- -------- --------- --------- Income from continuing operations 26,335 26,285 107,814 124,554 Discontinued operations: Income (loss) from discontinued operations before provision for income taxes 1,032 - 1,722 (379) (Provision) benefit for income taxes on discontinued Operations (145) - (5,544) 133 -------- -------- --------- --------- Earnings (loss) from discontinued operations 887 - (3,822) (246) -------- -------- --------- --------- Net income 27,222 26,285 103,992 124,308 Preferred stock dividends (3,163) (3,163) (12,650) (12,650) -------- -------- --------- --------- Net income available to common stockholders $24,059 $23,122 $91,342 $111,658 ======== ======== ========= ========= Basic earnings per common share: Earnings from continuing operations $0.97 $0.79 $4.00 $4.01 Earnings (loss) from discontinued operations 0.04 - (0.16) (0.01) -------- -------- --------- --------- Net earnings $1.01 $0.79 $3.84 $4.00 ======== ======== ========= ========= Diluted earnings per common share: Earnings from continuing operations $0.86 $0.74 $3.53 $3.61 Earnings (loss) from discontinued operations 0.03 - (0.12) (0.01) -------- -------- --------- --------- Net earnings $0.89 $0.74 $3.41 $3.60 ======== ======== ========= ========= Weighted average number of common shares outstanding: Basic 23,909 29,110 23,772 27,884 Diluted 30,644 35,748 30,514 34,542

BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March 31, March 31, 2008 2009 --------- --------- ASSETS Current assets: Cash and cash equivalents $290,050 $300,969 Accounts receivable from non-affiliates 204,599 194,030 Accounts receivable from affiliates 11,316 22,644 Inventories 176,239 165,438 Prepaid expenses and other 24,177 20,226 ---------- ---------- Total current assets 706,381 703,307 Investment in unconsolidated affiliates 52,467 20,265 Property and equipment - at cost: Land and buildings 60,056 68,961 Aircraft and equipment 1,428,996 1,823,011 ---------- ---------- 1,489,052 1,891,972 Less - Accumulated depreciation and Amortization (316,514) (350,515) ---------- ---------- 1,172,538 1,541,457 Goodwill 15,676 44,654 Other assets 30,293 25,590 ---------- ---------- $1,977,355 $2,335,273 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable $49,650 $44,892 Accrued wages, benefits and related taxes 35,523 39,939 Income taxes payable 5,862 - Other accrued taxes 1,589 3,357 Deferred revenues 15,415 17,593 Accrued maintenance and repairs 13,250 10,317 Accrued interest 5,656 6,434 Other accrued liabilities 22,235 20,164 Deferred taxes 9,238 6,195 Short-term borrowings and current maturities of long-term debt 6,541 5,972 ---------- ---------- Total current liabilities 164,959 154,863 Long-term debt, less current maturities 599,677 739,874 Accrued pension liabilities 134,156 81,380 Other liabilities and deferred credits 14,805 16,741 Deferred taxes 91,747 119,589 Minority interest 4,570 11,200 Commitments and contingencies Stockholders' investment: 5.50% mandatory convertible preferred stock 222,554 222,554 Common stock 239 291 Additional paid-in capital 186,390 421,391 Retained earnings 606,931 719,844 Accumulated other comprehensive loss (48,673) (152,454) ---------- ---------- 967,441 1,211,626 ---------- ---------- $1,977,355 $2,335,273 ========== ==========

BRISTOW GROUP INC. AND SUBSIDIARIES SELECTED OPERATING DATA (In thousands, except flight hours and percentages) Three Months Ended Twelve Months Ended March 31, March 31, ------------------ ------------------- 2008 2009 2008 2009 ------- ------- ------ --------- (Unaudited) Flight hours (excludes Bristow Academy and unconsolidated affiliates): U.S. Gulf of Mexico 32,018 19,603 139,938 117,686 Arctic 1,232 1,082 7,864 8,493 Latin America 7,845 14,646 40,439 51,404 Europe 10,403 13,681 44,343 47,493 West Africa 9,561 9,898 38,170 39,027 Southeast Asia 4,451 4,280 16,029 18,503 Other International 1,886 1,540 8,730 7,358 -------- -------- ---------- ---------- Consolidated total 67,396 64,730 295,513 289,964 ======== ======== ========== ========== Gross revenue: U.S. Gulf of Mexico $54,664 $45,006 $219,299 $222,701 Arctic 2,037 2,637 14,254 16,725 Latin America 14,400 20,569 63,863 80,533 WH Centralized Operations 692 (453) 4,105 7,850 Europe 89,828 105,294 361,744 401,504 West Africa 45,401 51,639 170,770 192,427 Southeast Asia 34,849 29,930 111,117 129,073 Other International 12,143 11,139 47,518 51,598 EH Centralized Operations 4,991 7,167 22,366 31,757 Bristow Academy 4,571 7,113 14,787 24,399 Intrasegment eliminations (3,390) (5,092) (17,195) (24,848) Corporate 99 56 136 84 -------- -------- ---------- ---------- Consolidated total $260,285 $275,005 $1,012,764 $1,133,803 ======== ======== ========== ========== Operating income: U.S. Gulf of Mexico $7,230 $6,732 $34,131 $31,705 Arctic (281) (5) 1,762 2,598 Latin America 2,205 4,803 13,618 21,972 WH Centralized Operations (2,591) (4,172) (2,100) (6,453) Europe 20,183 18,988 77,348 74,773 West Africa 6,633 18,603 31,941 46,310 Southeast Asia 8,044 9,545 23,754 19,889 Other International (5,041) 2,008 (283) 7,918 EH Centralized Operations 539 (8,874) (13,391) (27,723) Bristow Academy (197) 534 (809) 753 Gain on GOM Asset Sale - (1,564) - 36,216 Gain (loss) on disposal of other assets 5,469 3,224 9,390 9,089 Corporate (8,697) (6,969) (26,613) (28,471) -------- -------- ---------- ---------- Consolidated total $33,496 $42,853 $148,748 $188,576 ======== ======== ========== ========== Operating margin: U.S. Gulf of Mexico 13.2 % 15.0 % 15.6 % 14.2 % Arctic (13.8)% (0.2)% 12.4 % 15.5 % Latin America 15.3 % 23.4 % 21.3 % 27.3 % Europe 22.5 % 18.0 % 21.4 % 18.6 % West Africa 14.6 % 36.0 % 18.7 % 24.1 % Southeast Asia 23.1 % 31.9 % 21.4 % 15.4 % Other International (41.5)% 18.0 % (0.6)% 15.3 % Bristow Academy (4.3)% 7.5 % (5.5)% 3.1 % Consolidated total 12.9 % 15.6 % 14.7 % 16.6 %

SOURCE Bristow Group Inc.

Source: PR Newswire

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