Bristow Group Reports on 3rd Quarter Fiscal Year 2022 Results

Bristow Group Reports on 3rd Quarter Fiscal Year 2022 Results

4-Feb-2022 Source: Bristow

  • Total revenues of $295.6 million in Q3 FY22 compared to $301.6 million in Q2 FY22
  • Breakeven earnings and earnings per share in Q3 FY22 compared to net income of $2.8 million, or $0.10 per diluted share, in Q2 FY22
  • EBITDA adjusted to exclude special items and asset dispositions was $30.7 million in Q3 FY22 compared to $44.5 million in Q2 FY22
  • Adjusted Free Cash Flow was $41.8 million in Q3 FY22 compared to $19.1 million in Q2 FY22
  • Unrestricted cash balance was $274.0 million with total liquidity of $326.4 million

Bristow Group Inc. (NYSE: VTOL) today reported net loss attributable to the Company of $0.1 million, or $0.00 per diluted share, for its fiscal third quarter ended December 31, 2021 (“Current Quarter”) on operating revenues of $285.0 million compared to net income attributable to the Company of $2.8 million, or $0.10 per diluted share, in the quarter ended September 30, 2021 (“Preceding Quarter”) on operating revenues of $290.1 million.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $26.0 million in the Current Quarter compared to $45.3 million in the Preceding Quarter. EBITDA adjusted to exclude special items and gains or losses on asset dispositions was $30.7 million in the Current Quarter compared to $44.5 million in the Preceding Quarter. The following table provides a bridge between EBITDA, Adjusted EBITDA and Adjusted EBITDA excluding gains or losses on asset dispositions. See Reconciliation of Non-GAAP Metrics for a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA.

Three Months Ended,

December 31,
2021

September 30,
2021

EBITDA

$                  26,009

$                  45,264

Special items:

     Restructuring costs

$                         17

$                       117

     Loss on impairment

2,901

     PBH intangible amortization

3,060

3,060

     Merger-related costs

34

647

     Government grants

(222)

     Early extinguishment of debt fees

124

     Bankruptcy-related costs

29

103

     Insurance-related proceeds, net

899

     Nonrecurring professional services fees

2,253

817

     Bankruptcy-related settlement

(9,000)

$                    5,393

$                      (554)

Adjusted EBITDA

$                  31,402

$                  44,710

Gains on asset dispositions, net

(727)

(162)

Adjusted EBITDA excluding asset dispositions

$                  30,675

$                  44,548

“Bristow’s disappointing financial results in Q3 FY22 were due to a number of factors, including $3.4 million in costs related to the temporary relocation of operations to alternate base locations in the U.S. Gulf of Mexico due to damage caused by Hurricane Ida,” said Chris Bradshaw, President and Chief Executive Officer of Bristow. “The decline in profitability relative to the preceding quarter was also due to negative variances of $3.1 million related to the timing of major repairs, $1.1 million related to aircraft lease return costs, a $3.0 million adverse variance in foreign currency exchange, and a $1.8 million decline in equity earnings from unconsolidated affiliates. On the top line, higher revenues in our oil and gas service line, which were driven by increased utilization in the Americas region, were offset by reduced flight hours in our UK SAR contract and reduced revenues from fixed wing services related to COVID-19 travel restrictions and seasonality. Overall, the disappointing Q3 results are in contrast to our positive outlook for the trajectory of demand for our services as spending in the offshore oil and gas market is expected to increase significantly over the next few years, which should drive substantial improvements in Bristow’s financial results. Finally, we were pleased that the Company generated approximately $42 million in Adjusted Free Cash Flow in the current quarter despite the aforementioned challenges.”

Sequential Quarter Results

Operating revenues in the Current Quarter were $5.1 million lower compared to the Preceding Quarter. Operating revenues from oil and gas services were $1.3 million higher primarily due to higher utilization in the Americas region, partially offset by lower utilization in the Europe and Africa regions. Operating revenues from government services were $3.3 million lower primarily due to lower utilization and the weakening of the British pound sterling relative to the U.S. dollar. Operating revenues from fixed wing services were $3.0 million lower primarily due to COVID-related travel restrictions and seasonality.

Operating expenses were $3.1 million higher in the Current Quarter primarily due to higher fuel expenses, maintenance costs and costs incurred to relocate operations from bases damaged during Hurricane Ida, partially offset by lower personnel and insurance costs.

General and administrative expenses were $2.0 million higher in the Current Quarter primarily due to increased nonrecurring professional services fees.

During the Preceding Quarter, the Company recognized a $2.9 million loss on the impairment of H225 helicopter parts inventory.

During the Current Quarter, the Company sold one fixed wing aircraft and other equipment resulting in a net gain of $0.7 million. During the Preceding Quarter, the Company sold four S-76C++ medium helicopters and two AW109 light-twin helicopters resulting in a net gain of $0.2 million.

During the Current Quarter, the Company recognized losses of $0.9 million from unconsolidated affiliates compared to earnings of $1.0 million in the Preceding Quarter.

Other income, net of $4.0 million in the Current Quarter was primarily related to government grants to fixed wing services of $3.2 million and a favorable interest adjustment to the Company’s pension liability of $0.7 million. Other income, net of $15.3 million in the Preceding Quarter was primarily related to a bankruptcy-related legal settlement of $9.0 million, government grants to fixed wing services of $2.7 million, net foreign exchange gains of $2.2 million, insurance proceeds of $0.6 million and a favorable interest adjustment to the Company’s pension liability of $0.6 million.

Income tax benefit was $1.6 million in the Current Quarter compared to expense of $14.5 million in the Preceding Quarter. The change in income tax expense in the Current Quarter was driven by lower pre-tax earnings, the tax impact of valuation allowances on the Company’s net losses and the tax impact of deductible business interest expense.

Liquidity and Capital Allocation

As of December 31, 2021, the Company had $274.0 million of unrestricted cash and $52.4 million of remaining availability under its amended asset-based revolving credit facility (the “ABL Facility”) for total liquidity of $326.4 million. Borrowings under the amended ABL Facility are subject to certain conditions and requirements.

In the Current Quarter, purchases of property and equipment were $5.9 million, and cash proceeds from dispositions of property and equipment were $0.7 million, resulting in net (proceeds from) / purchases of property and equipment (“Net Capex”) of $5.2 million. In the Preceding Quarter, purchases of property and equipment were $14.3 million, and cash proceeds from dispositions of property and equipment were $3.2 million, resulting in Net Capex of $11.2 million. See Adjusted Free Cash Flow Reconciliation for a reconciliation of Net Capex and Adjusted Free Cash Flow.

Conference Call

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, February 4, 2022, to review the results for the fiscal third quarter ended December 31, 2021. The conference call can be accessed as follows:

All callers will need to reference the access code 1829005.

Within the U.S.:  Operator Assisted Toll-Free Dial-In Number: (800) 289-0720

Outside the U.S.:  Operator Assisted International Dial-In Number: (856) 344-9142

Replay

A telephone replay will be available through February 18, 2022 by dialing 888-203-1112 and utilizing the access code above.  An audio replay will also be available on the Company’s website at www.bristowgroup.com shortly after the call and will be accessible through February 18, 2022. The accompanying investor presentation will be available on February 4, 2022 on Bristow’s website at www.bristowgroup.com.

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