5-Aug-2010 Source: Bristow Group
Bristow Group Inc. (NYSE: BRS) today reported financial results for its June 2010 quarter.
“We are pleased with our June 2010 quarter results, which were slightly better than our internal expectations and compared favorably with the June quarter last year,” said William E. Chiles, President, Chief Executive Officer and Chief Financial Officer of Bristow Group. “Operating margins improved in all business units with the exception of our Other International business unit which was lower primarily due to delayed start up of new contracts in Brazil. We experienced only modest gains on the sale of a few aircraft; however, the aftermarket for used aircraft continues to show signs of improvement. Our gains on aircraft sales during the June 2010 quarter were $4.3 million lower than those during the same quarter last year. While these sales are a recurring part of our business, their timing can be unpredictable.
“Our North America business unit benefitted during the quarter from contracts with BP in the Gulf of Mexico, where 18 of our aircraft are supporting the well control and spill cleanup efforts. While we can’t predict how long this work will continue, during this quarter the new work more than offset lost business from customers stalled by the deep-water moratorium.”
JUNE 2010 QUARTER RESULTS
June 2010 quarter revenue totaled $292.2 million compared to $290.5 million in the June 2009 quarter.
Operating income in the June 2010 quarter was $39.7 million compared to $44.8 million in the June 2009 quarter.
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) totaled $59.8 million in the June 2010 quarter compared to $61.7 million in the June 2009 quarter. EBITDA is a measure that has not been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”). Please refer to disclosures contained at the end of this news release for additional information about EBITDA.
Net income totaled $20.8 million in the June 2010 quarter, or $0.57 per diluted share, compared to $23.7 million, or $0.66 per diluted share, in the June 2009 quarter.
“In addition to the activity with BP in the Gulf of Mexico, our June 2010 quarter results also benefitted from activity levels that remained robust in Australia and Nigeria,” Chiles said.
“Australia continues to generate improving returns, as we see the benefits of a two-year management overhaul. Results in this business unit also benefitted from changes in foreign currency exchange rates.
“Near-term results in Nigeria may flatten commencing in the December 2010 quarter due to the non-renewal of a contract under which we operate six of a customer’s aircraft. We expect the lost revenue of approximately $42 million per year to eventually be offset by new contract awards with other customers and increased ad hoc flying in this region.
“In Europe, overall activity levels declined in the June 2010 quarter, but they were in line with our expectations. With the startup of new contracts, we expect results from our Europe business unit to strengthen beginning in the September quarter. We are currently experiencing an increased level of tendering activity, which bodes well for the performance of this unit going forward.
“In our emerging market business unit, Other International, we were negatively impacted by our exit from Kazakhstan late last fiscal year and by weak results in Brazil caused mainly by higher costs associated with the startup of new aircraft contracts. We expect results from Brazil to be significantly stronger beginning in the September quarter.
“Most of our larger customers are primarily national and international oil companies, and with oil prices appearing to stabilize in the $70-90 per barrel range, we expect capital spending on both exploration and development to improve this year. Some large projects that were put on hold last year are being restarted, and we see additional opportunities in new and existing markets in the future.
“It is not possible to accurately predict demand for the remainder of the fiscal year in the Gulf of Mexico, given the political uncertainty over the deep water drilling moratorium. We expect our contract work with BP to decline when the spill cleanup effort begins to wind down. A small number of deepwater drilling rigs have already begun mobilization to other markets. However, we are well-positioned to respond to demand changes in this and other markets in the future.
“As previously disclosed, we expect revenue and earnings per share for the current fiscal year to be stronger than fiscal year 2010 as we put additional newer-technology aircraft to work for our customers and realize the benefit of cost efficiencies from our recently reorganized structure.
“We continue to expect a sequential improvement in our financial results for the second quarter of this fiscal year and we also anticipate a much stronger second half compared to the first half of fiscal year 2011,” Chiles said.
CAPITAL AND LIQUIDITY
In the June 2010 quarter, net cash generated by operating activities was $25.7 million and net cash used in investing activities was $23.2 million. At June 30, 2010, we had:
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. EDT (9:00 a.m. CDT) on Thursday, August 5, 2010, to review financial results for the 2011 first quarter. This release and the most recent investor slide presentation are available in the investor relations area of our web page at http://www.bristowgroup.com/. The conference call can be accessed as follows:
Via Webcast:
Via Telephone within the U.S.:
Via Telephone outside the U.S.:
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 http://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, business performance, fiscal 2011 results, industry capital spending and other market and industry conditions. 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 June 30, 2010 and annual report on Form 10-K for the fiscal year ended March 31, 2010. 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
June 30,
--------
2010 2009
---- ----
Gross revenue:
Operating revenue from non-
affiliates $254,594 $248,891
Operating revenue from affiliates 17,415 14,602
Reimbursable revenue from non-
affiliates 20,063 25,853
Reimbursable revenue from
affiliates 166 1,106
--- -----
292,238 290,452
------- -------
Operating expense:
Direct cost 183,164 180,677
Reimbursable expense 20,178 26,657
Depreciation and amortization 19,331 18,186
General and administrative 30,902 28,802
------ ------
253,575 254,322
------- -------
Gain on disposal of other assets 1,718 6,009
Earnings from unconsolidated
affiliates, net of losses (702) 2,633
---- -----
Operating income 39,679 44,772
Interest income 292 222
Interest expense (11,038) (10,012)
Other income (expense), net 515 (1,481)
--- ------
Income before provision for
income taxes 29,448 33,501
Provision for income taxes (8,540) (9,510)
------ ------
Net income 20,908 23,991
Net income attributable to
noncontrolling interests (100) (268)
---- ----
Net income attributable to
Bristow Group 20,808 23,723
Preferred stock dividends - (3,162)
--- ------
Net income available to common
stockholders $20,808 $20,561
======= =======
Earnings per common share:
Basic $0.58 $0.71
===== =====
Diluted $0.57 $0.66
----- -----
Weighted average number of common
shares outstanding:
Basic 35,969 29,133
Diluted 36,281 35,782
EBITDA $59,817 $61,699
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, March 31,
2010 2010
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $73,858 $77,793
Accounts receivable from non-affiliates 224,899 203,312
Accounts receivable from affiliates 18,533 16,955
Inventories 186,223 186,863
Prepaid expenses and other current assets 37,080 31,448
------ ------
Total current assets 540,593 516,371
Investment in unconsolidated affiliates 200,797 204,863
Property and equipment - at cost:
Land and buildings 86,091 86,826
Aircraft and equipment 2,032,803 2,036,962
--------- ---------
2,118,894 2,123,788
Less - Accumulated depreciation and
amortization (407,306) (404,443)
-------- --------
1,711,588 1,719,345
Goodwill 31,182 31,755
Other assets 20,405 22,286
------ ------
$2,504,565 $2,494,620
========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $46,424 $48,545
Accrued wages, benefits and related taxes 29,160 35,835
Income taxes payable - 2,009
Other accrued taxes 4,856 3,056
Deferred revenues 16,055 19,321
Accrued maintenance and repairs 12,836 10,828
Accrued interest 8,601 6,430
Other accrued liabilities 22,878 14,508
Deferred taxes 10,126 10,217
Short-term borrowings and current maturities
of long-term debt 14,890 15,366
------ ------
Total current liabilities 165,826 166,115
Long-term debt, less current maturities 696,594 701,195
Accrued pension liabilities 104,076 106,573
Other liabilities and deferred credits 19,852 20,842
Deferred taxes 148,625 143,324
Stockholders' investment:
Common stock 362 359
Additional paid-in capital 680,190 677,397
Retained earnings 840,953 820,145
Accumulated other comprehensive loss (158,089) (148,102)
-------- --------
1,363,416 1,349,799
Noncontrolling interests 6,176 6,772
----- -----
1,369,592 1,356,571
--------- ---------
$2,504,565 $2,494,620
========== ==========
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
------------------
June 30,
---------
2010 2009
---- ----
Cash flows from operating activities:
Net income $20,908 $23,991
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 19,331 18,186
Deferred income taxes 5,740 2,810
Discount amortization on long-term debt 776 725
Gain on disposal of assets (1,718) (6,009)
Gain on sale of joint ventures (578) -
Stock-based compensation 3,730 3,607
Equity in earnings from unconsolidated
affiliates less than dividends received 702 1,078
Tax benefit related to stock-based
compensation (163) (26)
Increase (decrease) in cash resulting from
changes in:
Accounts receivable (20,451) 9,866
Inventories (944) (6,336)
Prepaid expenses and other assets 162 (7,958)
Accounts payable (1,466) 6,081
Accrued liabilities 2,563 (13,127)
Other liabilities and deferred credits (2,942) 2,092
Net cash provided by operating activities 25,650 34,980
Cash flows from investing activities:
Capital expenditures (29,508) (86,040)
Deposits on assets held for sale 1,000 23,764
Proceeds from sale of joint ventures 1,291 -
Proceeds from asset dispositions 4,022 40,364
Acquisition, net of cash received - (178,638)
Net cash used in investing activities (23,195) (200,550)
Cash flows from financing activities:
Proceeds from borrowings 1,963 -
Repayment of debt (6,767) (1,404)
Distribution to noncontrolling interest
owners (637) -
Partial prepayment of put/call obligation (14) (19)
Preferred stock dividends paid - (3,162)
Issuance of common stock 111 346
Tax benefit related to stock-based
compensation 163 26
--- ---
Net cash used in financing activities (5,181) (4,213)
Effect of exchange rate changes on cash
and cash equivalents (1,209) 7,109
------ -----
Net decrease in cash and cash equivalents (3,935) (162,674)
Cash and cash equivalents at beginning of
period 77,793 300,969
------ -------
Cash and cash equivalents at end of period $73,858 $138,295
======= ========
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Ended
June 30,
--------
2010 2009
---- ----
Flight hours (excludes Bristow
Academy and
unconsolidated affiliates):
North America 21,404 22,117
Europe 12,967 14,855
West Africa 9,760 8,950
Australia 3,240 2,880
Other International 11,478 11,125
------ ------
Consolidated total 58,849 59,927
====== ======
Gross revenue:
North America $52,811 $49,856
Europe 101,691 115,065
West Africa 59,096 54,817
Australia 35,291 28,163
Other International 32,819 32,994
Corporate and other 10,842 11,816
Intrasegment eliminations (312) (2,259)
---- ------
Consolidated total $292,238 $290,452
======== ========
Operating income (loss):
North America $5,308 $4,426
Europe 18,299 19,778
West Africa 15,636 13,663
Australia 7,952 5,656
Other International 2,265 7,212
Corporate and other (11,499) (11,972)
Gain on disposal of assets 1,718 6,009
----- -----
Consolidated total $39,679 $44,772
======= =======
Operating margin:
North America 10.1% 8.9%
Europe 18.0% 17.2%
West Africa 26.5% 24.9%
Australia 22.5% 20.1%
Other International 6.9% 21.9%
Consolidated total 13.6% 15.4%
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
AS OF JUNE 30, 2010
Aircraft in Consolidated Fleet
------------------------------
Helicopters
-----------
Unconsolidated
Fixed Affiliates
Small Medium Large Training Wing Total(1) (2) Total
----- ------ ----- -------- ----- -------- ------------ -----
North
America 74 28 6 - - 108 - 108
Europe - 14 37 - - 51 63 114
West
Africa 12 33 5 - 3 53 - 53
Australia 2 13 18 - - 33 - 33
Other
International 5 41 13 - - 59 136 195
Corporate
and other - - - 80 - 80 - 80
--- --- --- --- --- --- --- ---
Total 93 129 79 80 3 384 199 583
=== === === === === === === ===
Aircraft
not
currently
in
fleet:(3)
On order - 3 4 - - 7
Under
option - 28 13 - - 41
(1) Includes 14 aircraft held for sale.
(2) The 199 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.
BRISTOW GROUP INC. AND SUBSIDIARIES
GAAP RECONCILIATIONS
EBITDA is a measure that has not been prepared in accordance with GAAP and
has not been audited or reviewed by our independent auditors. EBITDA is
therefore considered a non-GAAP financial measure. A description of
adjustments and a reconciliation to net income, the most comparable GAAP
financial measure to EBITDA, is as follows (in thousands):
Three Months Ended
June 30,
--------
2010 2009
---- ----
(Unaudited)
Net income $20,908 $23,991
Provision for income taxes 8,540 9,510
Interest expense 11,038 10,012
Depreciation and amortization 19,331 18,186
------ ------
EBITDA $59,817 $61,699
======= =======
