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Bristow Group Reports Fiscal 2010 Second Quarter Financial Results

November 4, 2009

HOUSTON, Nov. 4 /PRNewswire-FirstCall/ — Bristow Group Inc. (NYSE: BRS) 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 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 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.

SOURCE Bristow Group Inc.


Source: newswire



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