11-May-2014 Source: PHi
PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended March 31, 2014.
Consolidated operating revenues for the three months ended March 31, 2014 were $197.1 million, compared to $179.0 million for the three months ended March 31, 2013, an increase of $18.1 million. Oil and Gas segment revenues were $126.0 million for the three months ended March 31, 2014, compared to $112.8 million for the three months ended March 31, 2013, an increase of $13.2 million. The increase in this segment’s revenues is related primarily to increased heavy aircraft flight revenues resulting predominately from increased flight hours for these aircraft, as well as incremental rate increases implemented over the past year. Operating revenues in the Air Medical segment were $67.9 million for the three months ended March 31, 2014, compared to $63.4 million for the three months ended March 31, 2013, an increase of $4.5 million. The Air Medical revenue increase is due principally to increased revenues attributable to an expansion of our traditional provider operations, as well as increased revenues from our independent provider programs driven by an improvement in our payor mix and rate increases implemented over the past year.
During the quarter ended March 31, 2014, we issued $500 million of 5.25% Senior Notes due March 2019 in a private placement under the Securities Act of 1933, under more favorable terms and conditions than our previously outstanding 8.625% Senior Notes. A portion of the proceeds from these notes were used to retire $292.6 million of our $300 million previously outstanding 8.625% Senior Notes pursuant to a tender offer, at a total cost of $329.4 million including the tender premium and accrued interest. We subsequently redeemed the remaining $7.4 million of 8.625% Senior Notes on April 16, 2014, at a redemption price of 108.3% of the face amount plus accrued interest. As a result of our repurchase of the 8.625% Senior Notes, we recorded a non-recurring pretax charge of $29.2 million in the quarter ended March 31, 2014. Consequently, we experienced a net loss for the quarter ended March 31, 2014. Consolidated net loss for the three months ended March 31, 2014 was $5.3 million compared to net income of $8.8 million for the three months ended March 31, 2013. Losses before income taxes for the three months ended March 31, 2014 was $8.5 million compared to earnings before income tax of $14.7 million for the same period in 2013. Losses per diluted share was $0.34 for the current quarter compared to earnings per diluted share of $0.57 for the prior year quarter. The decrease in earnings before taxes for the quarter ended March 31, 2014 is attributable to the above-mentioned non-recurring pretax charge of $29.2 million related to the early retirement of our 8.625% Senior Notes, partially offset by increased profits in our Oil and Gas and Technical Services segments. Exclusive of the loss on debt extinguishment of $29.2 million, our net income for the three months would have been $12.9 million, which represents an increase of $4.3 million over the same period in 2013.
Oil and Gas segment profit was $27.6 million for the quarter ended March 31, 2014, compared to segment profit of $19.0 million for the quarter ended March 31, 2013. The increase in profit is primarily attributable to the increased revenue described above.
Air Medical segment profit was $6.4 million for the quarter ended March 31, 2014, compared to a segment profit of $7.6 million for the quarter ended March 31, 2013. The decrease in profit is primarily attributable to increased employee compensation expenses due to additional personnel in the segment and compensation rate increases. Aircraft operating expenses also increased due to additional aircraft added to the fleet. The severe weather experience throughout our U.S. operations had a substantial negative impact on our flight volumes in Air Medical. Although we did experience a decline in segment profits over the same period in 2013, we expect improved performance over the remainder of the year.
Technical Services revenues were $3.1 million for the three months ended March 31, 2014, compared to $2.8 million for the three months ended March 31, 2013. Technical Services segment profit was $1.2 million for the three months ended March 31, 2014, compared to $1.0 million for the three months ended March 31, 2013. Direct expenses increased $0.1 million compared to the prior year quarter.
PHI provides helicopter transportation and related services to a broad range of customers including the oil and gas and air medical industries, and also provides third-party maintenance services to select customers. PHI Voting Common Stock and Non-Voting Common Stock are traded on The NASDAQ Global Market (symbols PHII and PHIIK).
