Bristow Group report Q4 and full year to 31 March 2011

Bristow Group report Q4 and full year to 31 March 2011

11-May-2011 Source: Bristow Group

Bristow Group Inc. (NYSE: BRS) today reported adjusted net income, excluding special items, for the fourth quarter ended March 31, 2011 of $37.0 million, or $1.00 per diluted share, compared to $26.6 million, or $0.73 per diluted share in the same period a year ago. GAAP net income for the fourth quarter was$30.9 million, or $0.84 per diluted share. The quarter benefited from operating improvement in the Europe and Other International Business Units as well as increased earnings from unconsolidated affiliates and higher aircraft sales. The special items referred to herein are detailed on page nine of this news release.

Revenue for the fourth quarter increased 9.8% to $310.1 million from$282.4 million in the same period a year ago. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased 30.4% to $77.5 million from $59.4 million in the March 2010 quarter. Revenue was positively impacted by improvement in the underlying operations in theEurope, Australia and Other International Business Units.

“As previously anticipated, the financial results for the second half of the year exceeded the first half. We were able to deliver sequential improvement in operating income, EBITDA and earnings per share in the fourth quarter,” said William E. Chiles, President and Chief Executive Officer of Bristow Group. “The performance of several of our business units during the quarter was strong and our operating margin improved to 16.1%, driven by continued excellent results in our Europe and Other International Business Units.”

On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share on the issued and outstanding shares of common stock.

“We are proud to announce our Board’s decision to initiate a quarterly cash dividend on our common stock,” said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. “Our confidence in Bristow’s ability to generate cash flow, while growing the business across the globe and maintaining a prudent financial profile, allows us to create an exceptional investment opportunity.”

Adjusted net income, excluding special items, for the fiscal year endedMarch 31, 2011 totaled $121.3 million, or $3.30 per diluted share, compared to $109.1 million, or $3.02 per diluted share in the same period a year ago. GAAP net income for the fiscal year ended March 31, 2011was $132.3 million, or $3.60 per diluted share, and revenue totaled$1.233 billion. Revenue increased across all primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients in North America. The special items referred to herein are detailed on pages nine and ten of this news release.

“Fiscal 2011 turned out to be a strong year, distinguished by record revenue, operating income and net income,” said Bill Chiles. “I am proud of the entire Bristow team, who produced top safety performance while also delivering on our commitment to improving financial performance, lowering cost of capital, and commencing a balanced capital allocation plan. We look forward to carrying this quarter’s momentum into fiscal 2012, where the combination of our financial strength and growth opportunities should lead to significant value creation for Bristow’s shareholders. In light of these factors and our more stable and predictable business profile, we have decided to provide annual earnings per share guidance starting with fiscal 2012.”

FOURTH QUARTER FY2011 RESULTS

  • Revenue increased 9.8% to $310.1 million compared to $282.4 million in the same period a year ago.
  • Operating income increased 16.5% to $49.8 million compared to$42.8 million in the same period a year ago. Operating margin increased to 16.1% from 15.2% in the fourth quarter of fiscal 2010.
  • EBITDA increased 30.4% to $77.5 million compared to $59.4 million in the March 2010 quarter.
  • GAAP net income increased 8.5% to $30.9 million, or $0.84 per diluted share, compared to $28.4 million, or $0.78 per diluted share, in the March 2010 quarter.

Our Europe Business Unit saw an increase in flying activity over the prior year quarter, which resulted in increased operating margin in this market.

Our West Africa Business Unit was affected by a high level of maintenance and freight costs in the March 2011 quarter. We have been able to re-contract aircraft after the loss of a major contract in this market. We expect to benefit from new contract awards and our continuing effort to reduce aircraft maintenance delays in this market in future periods.

Our North America Business Unit continues to be a challenging market due to the impact of the severe reduction in the issuance of drilling and completion permits in the aftermath of the Macondo accident. In addition, difficult weather conditions in February coupled with the ending of our support work for BP negatively affected this business unit. We are reducing our cost structure in order to align the business with the current level of demand. A few drilling permits were issued during the fourth quarter in the U.S. Gulf of Mexico, and activity has started to pick up very recently.

Our Australia Business Unit saw a significant increase in revenue over the prior year resulting from new contracts and a favorable impact of change in foreign currency exchange rates. However, an increase in compensation and other costs has contributed to a decrease in operating margin versus the same quarter last year. We do not expect some of the costs incurred in the quarter to recur at the same levels in future periods, which when coupled with a continued high level of activity in this market is expected to result in improved operating margin in future quarters.

Our Other International Business Unit’s operating margin was significantly higher primarily due to strong performance of our unconsolidated affiliate in Brazil, which generated $6.2 million of equity earnings for the three months ended March 31, 2011. We made progress in our exit strategy inMexico by entering into an agreement to sell our 24% interest in an unconsolidated affiliate to our joint venture partner and reduced our financial exposure to the Mexican market.

During the March 2011 quarter we generated $5.4 million in after-tax gains on the sale of seven aircraft, which included two older generation large aircraft and related inventory.

FISCAL YEAR ENDED MARCH 31, 2011

  • Revenue totaled $1.233 billion compared to $1.168 billion for the same period a year ago.
  • Operating income was $189.7 million compared to $180.9 millionfor the fiscal year ended March 31, 2010.
  • EBITDA totaled $277.5 million compared to $259.6 million for the fiscal year ended March 31, 2010.
  • GAAP net income totaled $132.3 million, or $3.60 per diluted share, compared to $112.0 million, or $3.10 per diluted share for the fiscal year ended March 31, 2010.

Our fiscal year ended March 31, 2011 results benefited from revenue increases across all of our primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, which was driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients.

Operating income, EBITDA, net income and earnings per share increased from the prior year due to higher earnings from unconsolidated affiliates, primarily our investment in Brazil, and improved performance in theEurope, North America and Other International Business Units. Additionally, our effective tax rate was 5.1% versus 20.4% in the prior fiscal year. This reduction was driven by a global restructuring of our operations as part of the continuing implementation of our global business strategy, in addition to a shift of our expected earnings for the current fiscal year to lower tax jurisdictions. This benefit was partially offset by a lower level of aircraft sales, increased interest expense and a reduction in other income (expense), net.

DIVIDEND

On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share of our common stock. The dividend will be paid on June 10, 2011 to shareholders of record on May 20, 2011. Based on shares outstanding at March 31, 2011, total dividend payments to be made during the three months ended June 30, 2011 will be approximately $5.4 million.

“We expect to continue generating substantial cash flow after having increased our operating leverage through significant investment in our aircraft fleet. We believe it is now time to return some of the cash flow in the form of a dividend to our shareholders while making our stock more attractive to international and income-oriented investors,” said Jonathan Baliff.

“The continued execution of our ongoing capital allocation strategy of investing in our fleet, pursuing other growth opportunities and returning cash to shareholders, while maintaining prudent balance sheet management, should provide additional certainty about our financial strength that has allowed us to initiate this dividend.”

GUIDANCE

Bristow issued today diluted earnings per share guidance for fiscal year 2012 of $3.55 to $3.90.

“Our 2012 guidance demonstrates our confidence in our business model anchored by our contract structure and our clients’ focus on production,” said Jonathan Baliff. “This makes our operating performance more stable and predictable. This GAAP earnings per share guidance does not include unrealized gains and losses on disposals of assets as well as special items because their timing and amounts are more variable and less predictable. Our objectives in providing earnings guidance include aligning shareholders and other market participants with management’s expectation of our operational performance and how management directs and operates our business.”

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 cannot currently anticipate or predict could result in earnings per share for fiscal year 2012 that are significantly above or below this guidance. Factors that could cause such changes are described below under Forward-Looking Statements Disclosure.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Wednesday, May 11, to review financial results for the fiscal year 2011 fourth quarter and year-ended March 31, 2011. 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:

  • Visit Bristow Group’s investor relations Web page athttp://www.bristowgroup.com/
  • Live: Click on the link for “Bristow Group Fiscal 2011 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 May 25, 2011and may be accessed by calling toll free 1-800-406-7325, passcode: 4435513#

Via Telephone outside the U.S.:

  • Live: Dial 480-629-9818
  • Replay: A telephone replay will be available through May 25, 2011and may be accessed by calling 303-590-3030, passcode: 4435513#

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated and one of two helicopter service providers to the offshore energy industry with global operations. 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, Russiaand Trinidad. For more information, visit the Company’s website athttp://www.bristowgroup.com/.

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