9-Aug-2011 Source: Bristow Group
Bristow Group Inc. (NYSE: BRS) today reported adjusted net income, excluding asset disposition effects, for the first quarter ended June 30, 2011 of $20.0 million, or $0.54 per diluted share, compared to $19.6 million, or $0.54 per diluted share, in the same period a year ago. GAAP net income for the first quarter was $21.0 million, or $0.57 per diluted share, compared to GAAP net income of $20.8 million, or $0.57 per diluted share in the same period a year ago.
Operating revenue for the first quarter increased 5% to $286.8 million from $272.0 million in the first quarter of fiscal year 2011. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which excludes asset disposition effects, was $58.1 million for each of the quarters ended June 30, 2011 and 2010. Net cash provided by operating activities increased to $52.9 million in the June 2011 quarter from $25.7 million in the June 2010 quarter.
The quarter’s financial performance was negatively affected by several factors, including:
These three main factors, in aggregate, reduced earnings per diluted share by approximately$0.22 and masked significant growth in the Other International Business Unit in the first quarter. Increased compensation cost represented 88% of the $13.5 million increase in direct cost and 54% of the $8.7 million increase in general and administrative expense over the prior year’s June quarter.
“Despite first quarter results that were affected by front-loaded compensation costs, we remain on track to meet the annual earnings per share guidance of $3.55 – $3.90 we provided on our last quarterly conference call as we do not anticipate the majority of these costs incurred this quarter to recur in the remainder of fiscal year 2012,” said William E. Chiles, President and Chief Executive Officer of Bristow Group. “We had operational successes in the first quarter that grew our revenue, including new contracts and improved flight activity in our Europe, Australia and Other International Business Units.”
“As previously disclosed, we continue to expect revenue and earnings per share for the current fiscal year to be stronger than fiscal year 2011 as we contract our newer technology aircraft for our clients and take advantage of the growth opportunities in the Other International Business Unit as well as the gradual improvement in activity for the rest of the world.” Chiles added, “We expect improvement in our financial results for the next three quarters of this fiscal year and, similar to last year, anticipate a stronger second half compared to the first half of fiscal year 2012.”
FIRST QUARTER FY2012 RESULTS
Our Europe Business Unit saw an increase in flying activity over the prior year quarter as a result of new contracts with existing clients, which resulted in increased operating income. Operating margin remained mostly flat despite the increase in operating revenue and operating income as a result of the additional compensation cost incurred in the current quarter, which was partially offset by an increase in earnings from unconsolidated affiliates.
Operating income and operating margin in our West Africa Business Unit continued to be negatively affected by the loss of a major contract that was not fully offset by increased activity on two new contracts. Additionally, operating results were affected by an increase in direct cost due to salaries and benefits, depreciation, housing and security expense.
Our North America Business Unit continues to face a challenging market due to the impact of the severe reduction in the issuance of drilling and completion permits following the Deepwater Horizon event in 2010. We are continuing to reduce our cost structure in order to align the business with the current level of demand. However, based on current discussions with our major clients, especially concerning activity for large aircraft, we anticipate an increasing level of activity in the Gulf during the second half of fiscal year 2012.
Our Australia Business Unit saw an increase in revenue over the prior year resulting from new contracts and a favorable impact of changes in foreign currency exchange rates. However, operating income and operating margin declined primarily due to an increase in training costs with the introduction of a new aircraft type into this market and an increase in depreciation and amortization expense. We do not expect some of the costs incurred in the first 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 the second half of fiscal year 2012.
As anticipated, our Other International Business Unit is emerging as the growth engine for Bristow. In the first quarter, higher operating revenue was delivered by our entry into Suriname, increased activity in Brazil and Russia and new contracts in Ghana and Trinidad. Operating margin was significantly higher primarily due to the strong performance of our unconsolidated affiliate inBrazil, which generated $2.7 million of equity earnings for the three months ended June 30, 2011.
GUIDANCE
Bristow is reaffirming today the diluted earnings per share guidance provided in May 2011 for the full fiscal year 2012 of $3.55 to $3.90.
“Our 2012 guidance reaffirmation demonstrates confidence in the financial improvement Bristow has historically shown through the year, especially in the second half. Our success will depend on our continued ability to grow and implement a new financial management tool called Bristow Value Added (BVA),” said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. “A key objective is to increase our cash return on capital over our cost of capital while continuing top-line growth through fleet additions and our Client Promise effort to get paid for Target Zero performance. The cash returns generated by these successes will differentiate Bristow as a unique investment in the oilfield service sector.”
As a reminder, our 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. 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 Tuesday, August 9, to review financial results for the fiscal year 2012 first quarter ended June 30, 2011. 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:
Via Webcast:
Via Telephone within the U.S.:
Via Telephone outside the U.S.:
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,Russia and Trinidad. For more information, visit the Company’s website at www.bristowgroup.com.
Full financial statements can be see here
