PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended September 30, 2012.

Oil and Gas segment revenues were $115.0 million for the three months ended September 30, 2012, compared to $96.6 million for the three months ended September 30, 2011, an increase of $18.4 million. Flight hours were 31,608 for the current quarter compared to 29,901 for the same quarter in the prior year. The increase in revenue is primarily due to increased medium and heavy aircraft flight hours and revenues, due to an increase in deepwater drilling activity compared to the same period in 2011 when there was no significant deepwater drilling activity due to the Deepwater Horizon incident.

Our Oil and Gas segment profit was $19.4 million for the quarter ended September 30, 2012, compared to $13.5 million for the quarter ended September 30, 2011. Operating margins (segment profit divided by operating revenues) were 17% for the three months ended September 30, 2012, compared to 14% for the three months ended September 30, 2011. The increase in segment profit of $5.9 million was primarily due to increased revenues of $18.4 million, partially offset by increased direct expenses of $12.4 million. The Oil and Gas segment revenues are primarily driven by contracted aircraft and flight hours. Costs are primarily fixed, and are driven by the number of aircraft, and a portion is variable which is driven by flight hours.

Air Medical segment revenues were $54.0 million for the three months ended September 30, 2012, compared to $46.9 million for the three months ended September 30, 2011, an increase of $7.1 million. The increase was primarily due to increased revenue of $6.0 million in the independent provider programs related to improved payor mix, rate increases implemented in 2011 and 2012, and increased patient transports. Operating revenues related to hospital based contracts increased $1.1 million due primarily to revenue recorded in the quarter related to mobilization of aircraft for the SRCA project. Total patient transports were 4,986 for the three months ended September 30, 2012, compared to 4,881 for the three months ended September 30, 2011.

Our Air Medical segment’s profit was $7.0 million for the quarter ended September 30, 2012, compared to $6.1 million for the quarter ended September 30, 2011. Operating margins were 13% for the three months ended September 30, 2012, and the three months ended September 30, 2011. The improvement in segment profit was primarily due to an increase in transports, increase in rates in 2011 and 2012, closure of unprofitable bases, and cost reductions. Earnings for the three months ended September 30, 2012 also included a net loss before tax of $2.8 million for the SRCA project due to operational delays in startup of the project. We expect the SRCA project to generate slightly positive earnings for 2012 due to revenue operations increasing throughout the fourth quarter for aircraft and contracted ground resources.

Technical Services revenues were $1.9 million for the three months ended September 30, 2012, compared to $2.1 million for the three months ended September 30, 2011. Direct expenses in our Technical Services segment were $1.8 million for the three months ended September 30, 2012, and for the three months ended September 30, 2011. Our Technical Services segment’s profit was $0.1 million for the three months ended September 30, 2012, compared to $0.3 million for the three months ended September 30, 2011.

Oil and Gas segment revenues were $312.3 million for the nine months ended September 30, 2012, compared to $264.3 million for the nine months ended September 30, 2011, an increase of $48.0 million. Flight hours were 88,155 for the nine months ended September 30, 2012, compared to 84,151 for the same period in 2011. The increase in Oil and Gas revenues was related primarily to increased medium and heavy aircraft flight hours and revenue due to increased deepwater drilling activity in the Gulf of Mexico. In 2011, there was no significant deepwater drilling activity following the Macondo incident in 2010.

Our Oil and Gas segment profit was $45.7 million for the nine months ended September 30, 2012, compared to $30.0 million for the nine months ended September 30, 2011. The $15.7 million increase was due to the increase in revenues of $48.0 million, partially offset by an increase in direct expenses of $32.2 million. Operating margins were 15% for the nine months ended September 30, 2012, compared to 11% for the nine months ended September 30, 2011. The increase in segment profit and margin is primarily due to increased medium and heavy aircraft revenue attributable to increased deepwater drilling activity in the Gulf of Mexico, as discussed above.

Air Medical segment revenues were $150.6 million for the nine months ended September 30, 2012, compared to $129.5 million for the nine months ended September 30, 2011, an increase of $21.1 million or 17%. Revenues in the independent provider programs increased $17.7 million, primarily due to increased patient transports, improvement in the payor mix, and rate increases implemented in the prior and current years. Revenues related to hospital based contracts increased $3.3 million, including revenue of $1.5 million recorded in the nine month period related to aircraft mobilization for the SRCA project. Patient transports were 13,954 for the nine months ended September 30, 2012, compared to 13,441 for the nine months ended September 30, 2011, an increase of 513 transports. Flight hours were 26,329 for the nine months ended September 30, 2012, compared to 25,682 for the nine months ended September 30, 2011.

Our Air Medical segment profit was $20.2 million for the nine months ended September 30, 2012, compared to $11.5 million for the nine months ended September 30, 2011. Operating margins were 13% and 9% for the nine months ended September 30, 2012 and 2011, respectively. The increase in segment profit was primarily due to an increase in transports, increase in rates in 2011 and 2012, closure of unprofitable bases, and cost reductions. Earnings for the nine months ended September 30, 2012 also included a net loss before tax of $3.7 million for the SRCA project due only to operational delays in startup of the project.

Technical Services revenues were $6.6 million for the nine months ended September 30, 2012, compared to $7.4 million for the nine months ended September 30, 2011. Direct expenses in our Technical Services segment were $5.4 million for the nine months ended September 30, 2012, compared to $5.6 million for the nine months ended September 30, 2011. Our Technical Services segment’s profit was $1.2 million for the nine months ended September 30, 2012, compared to $1.8 million for the nine months ended September 30, 2011. Operating margins were 19% for the nine months ended September 30, 2012, compared to 24% for the nine months ended September 30, 2011.

Full financial statements can be seen here