Bristow Group Inc. (NYSE: BRS) today reported net income for the March 2012 quarter of $14.2 million, or $0.39 per diluted share, compared to net income of $30.9 million, or $0.84 per diluted share, in the same period a year ago. Adjusted net income, which excludes special items and asset disposition effects, was $44.6 million, or $1.22 per diluted share, for the March 2012 quarter, an increase of $12.8 million, or$0.36 per diluted share, over the March 2011 quarter.
Operating revenue for the March 2012 quarter increased 16% to $318.7 million from $273.7 million in the March 2011 quarter, with revenue growth across most of our business units led by Europe and West Africa.
Adjusted earnings before interest, taxes, depreciation, amortization and rent ("Adjusted EBITDAR"), which excludes special items and asset disposition effects, was $99.5 million for the March 2012 quarter compared to $81.1 million in the same period a year ago. Net cash provided by operating activities totaled $37.4 million for the March 2012 quarter compared to$36.0 million in the March 2011 quarter, and increased 53% to $231.3 million for the fiscal year ended March 31, 2012 from $151.4 million in the prior fiscal year.
The March 2012 quarter's GAAP net income performance was negatively affected by the following:
- An impact of $30.7 million related to aircraft sales activities, including a loss on disposal of assets of $28.6 million (which includes non-cash impairment charges of $23.6 millionassociated with held for sale aircraft) and $2.1 million in direct costs associated with a sale transaction executed during the quarter involving 11 large aircraft,
- Non-cash impairment charges related to inventory of $1.3 million and two medium aircraft of$2.7 million resulting from a review of our operational fleet,
- A $5.1 million decrease in earnings from unconsolidated affiliates, primarily resulting from lower earnings from our investment in Brazil,
- A $31.0 million increase in direct costs and general and administrative expenses over the same period a year ago, primarily associated with increased activity, increased rent expense associated with a shift toward the leasing of more aircraft in the latter half of the fiscal year and higher corporate compensation, and
- A $0.8 million increase in tax expense as a result of an internal restructuring, partially offset by a reduction in tax expense from the release of a tax reserve in a foreign jurisdiction.
Excluding the gains and losses on disposals of assets and special items in the March 2012and March 2011 quarters, adjusted EBITDAR, adjusted net income and adjusted EPS improved over the March 2011 quarter primarily due to significant revenue growth across a majority of our global operations and a lower effective tax rate. See a break out of the special items impacting results for the March 2012 and March 2011 quarters at the end of this release.
"During fiscal year 2012, we continued to make progress in increasing our total return to shareholders," said William E. Chiles, President and Chief Executive Officer of Bristow Group. "Our results for the March quarter exceeded our internal expectations as a result of better utilization of our fleet, cost containment, and more demand for our premium product. The strong adjusted EPS and EBITDAR performance was driven by Bristow's Client Promise – to provide unmatched safety, reliability and hassle-free service – and resulted in stronger revenue generation in Nigeria and noteworthy sequential improvement in margins in Australiaand Europe."
"Going forward, we are expecting solid revenue growth in fiscal year 2013 while maintaining adjusted EBITDAR margins at the level attained in fiscal year 2012," Mr. Chiles added. "Bristow's record revenue and operating cash flows during this last fiscal year demonstrate our financial strength and commitment to smarter growth and a balanced return for our shareholders. This is why our Board of Directors is increasing our quarterly dividend 33% to$0.20 per share effective this quarter, reinforcing our confidence in the unique business model and investment vehicle that our company and talented employees represent."
FOURTH QUARTER FY2012 RESULTS
- Operating revenue increased 16% to $318.7 million compared to $273.7 million in the same period a year ago.
- Operating income decreased by 47% to $26.2 million in the March 2012 quarter compared to $49.8 million in the March 2011 quarter, significantly impacted by non-cash impairment charges of $27.6 million.
- Net income decreased by 54% to $14.2 million, or $0.39 per diluted share, compared to$30.9 million, or $0.84 per diluted share, in the March 2011 quarter. Adjusted net income increased 41% to $44.6 million, or $1.22 per diluted share, compared to $31.7 million, or$0.86 per diluted share, in the March 2011 quarter.
- Adjusted EBITDAR, which excludes special items and asset disposition effects, increased 23% to $99.5 million for the March 2012 quarter compared to $81.1 million in the same period a year ago.
- Cash as of March 31, 2012 totaled $262 million, up 125% from $116 million as of March 31, 2011. Our total liquidity, including cash on hand and unused amounts on our revolving credit facility, was $402 million as of March 31, 2012, up 54% from $261 million as of March 31, 2011.
Our Europe Business Unit experienced an increase in flying activity in the Northern North Seain the U.K. and in Norway, which led to a 20% increase in operating revenue and improved adjusted EBITDAR margin to 36.1% from 34.4% in the prior year quarter.
Our West Africa Business Unit saw increased flying activity over the prior year quarter from new and existing contracts plus ad hoc flying, which led to a 30% increase in operating revenue and improved adjusted EBITDAR margin to 36.6% from 34.3% in the prior year quarter.
Our North America Business Unit continues to benefit from an increase in activity in the U.S.Gulf of Mexico as more drilling and completion permits are being issued and new large aircraft are operating in this market. Operating revenue increased 7% resulting from the addition of new large aircraft during fiscal year 2012 despite a decrease in flight hours from the March 2011 quarter. This revenue increase, coupled with a reduction in cost structure and the leasing of new aircraft, led to a more than doubling of adjusted EBITDAR margin to 19.4% from 8.5% in the prior year quarter.
Our Australia Business Unit saw an increase in revenue over the prior year quarter resulting from new contract work offsetting the loss of a major contract in May 2011. We saw a turnaround in this market in the second half of fiscal year 2012. The March 2012 quarter saw a sequential improvement with operating revenue of $43.4 million and adjusted EBITDAR margin of 35.6%, compared to $33.5 million and 23.5%, respectively, for the December 2011quarter. The second half of fiscal year 2012 saw operating revenue of $76.9 million, 8% higher than the first half of the year, and adjusted EBITDAR margin of 30.4% compared to 17.8% in the first half.
We continue to see substantial growth opportunity in our Other International Business Unit as new aircraft commence work in a number of locations. However, our quarterly results were impacted negatively by earnings from Lider in Brazil due to a decline in aircraft utilization as certain aircraft were offline for maintenance, start up costs incurred in advance of revenue generation from new aircraft and changes in foreign currency exchange rates. We expect Lider's results to improve over the remainder of calendar 2012, with the second half of the year being stronger than the first half as aircraft return to operations and new aircraft begin operating. As a result of lower earnings from Lider in the March 2012 quarter, our adjusted EBITDAR margin for Other International decreased to 42.9% from 59.4% in the March 2011quarter.
FISCAL YEAR 2012 RESULTS
- Operating revenue increased 8% to just under $1.2 billion compared to just over $1.1 billiona year ago.
- Operating income decreased 39% to $115.8 million compared to $189.7 million in fiscal year 2011, significantly impacted by non-cash impairment charges of $57.6 million.
- Net income decreased 52% to $63.5 million, or $1.73 per diluted share, compared to $132.3 million, or $3.60 per diluted share, for fiscal year 2011. Adjusted net income increased slightly to $114.6 million, or $3.12 per diluted share, compared to $113.0 million, or $3.08per diluted share, for fiscal year 2011.
- Adjusted EBITDAR, which excludes special items and asset disposition effects, was $319.5 million compared to $297.7 million for fiscal year 2011.
FLEET MANAGEMENT AND LEASING STRATEGY
In fiscal year 2012, we fully implemented our new Bristow Value Added ("BVA") financial management framework — which replaced Return on Capital Employed ("ROCE") — to enhance our focus on the returns we deliver above our capital costs. The BVA framework has yielded excellent results leading to a number of value-enhancing transactions.
In March 2012, we completed the sale of eleven large AS332L aircraft with cash proceeds of$28.9 million received in March relating to the first nine of these aircraft sold. The final two aircraft will be sold in fiscal year 2013. While resulting in a GAAP loss, this transaction allowed for the removal of older aircraft from our fleet that generated negative BVA and the reinvestment into newer, larger aircraft to generate positive BVA.
Also as a part of our BVA implementation, management commenced a new financing strategy in the December 2011 quarter whereby we will be using operating leases to a greater extent than in the past. As part of this strategy, during the period from December 2011 throughMarch 2012 we received $171.2 million for the sale of nine existing and in-construction aircraft that we subsequently leased back.
"We continue to see success in implementing BVA, with a 53% increase in operating cash flow combined with low-cost, capital-efficient operating leases in fiscal year 2012," said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. "We expect to enter into more operating leases in future periods, with an initial aim for these leases to account for 20% to 30% of our Large Aircraft Equivalent ("LACE") aircraft."
In May 2011, our Board of Directors initiated a dividend of $0.15 per share of our common stock and then subsequently declared dividends at the same level for the remaining three quarters of fiscal year 2012. On May 18, 2012, our Board of Directors declared a dividend of$0.20 per share, a 33% increase from the previous level, reflecting management's confidence in our cash generation ability and commitment to return value to our shareholders while we continue to grow globally.
This dividend will be paid on June 15, 2012 to shareholders of record on June 5, 2012. Based on shares outstanding at March 31, 2012, total dividend payments to be made during the three months ended June 30, 2012 will be approximately $7.2 million.
Bristow is issuing diluted earnings per share guidance for the full fiscal year 2013 that began on April 1, 2012 of $3.25 to $3.55, reflecting our expectation for continued growth, operational and capital efficiency, and the benefit of the Bristow Client Promise initiative across our business units.
As a reminder, our GAAP earnings per share guidance does not include gains and losses on disposals of assets as well as special items because their timing and amounts are more variable and less predictable. This guidance is based on current foreign currency exchange rates. In providing this guidance, the Company has not included the impact of any changes in accounting standards and any impact from significant acquisitions or divestitures. Changes in events or other circumstances that the Company does not currently anticipate or predict could result in earnings per share for fiscal year 2013 that are significantly above or below this guidance. Factors that could cause such changes are described below under Forward-Looking Statements Disclosure.
"Our dedication to the Bristow Client Promise: to provide unmatched safety, reliability and hassle-free service, has the company positioned for continued success in fiscal year 2013." Mr. Baliff added, "Fiscal year 2013 EPS growth, when combined with our financial strength and commitment to a balanced return for investors, can deliver that success to our shareholders."
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) onThursday, May 24, 2012 to review financial results for the fiscal year 2012 fourth quarter ended March 31, 2012. This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com. The conference call can be accessed as follows:
- Visit Bristow Group's investor relations Web page at www.bristowgroup.com
- Live: Click on the link for "Bristow Group Fiscal 2012 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 1-877-941-8609
- Replay: A telephone replay will be available through June 7, 2012 and may be accessed by calling toll free 1-800-406-7325, passcode: 4533630#
Via Telephone outside the U.S.:
- Live: Dial 1-480-629-9692
- Replay: A telephone replay will be available through June 7, 2012 and may be accessed by calling 1-303-590-3030, passcode: 4533630#
and the full financial statements are on this page
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