Bristow announces Q4 and full year 2022 earnings report

Bristow announces Q4 and full year 2022 earnings report

1-Jun-2022 Source: Bristow

 

  • Total revenues of $287.4 million in Q4 FY22 compared to $295.6 million in Q3 FY22
  • Net loss of $4.3 million, or $(0.15) per diluted share, in Q4 FY22
  • EBITDA adjusted to exclude special items and asset dispositions was $35.9 million in Q4 FY22 compared to $30.7 million in Q3 FY22
  • As of March 31, 2022, unrestricted cash balance was $263.8 million with total liquidity of $318.7 million
  • Amended and extended asset-based revolving credit facility (the “ABL Facility”) until 2027
  • Announced acquisition of British International Helicopters Limited (“BIH”), expanding government services business

Bristow Group Inc. (NYSE: VTOL) reported net loss attributable to the Company of $4.3 million, or $(0.15) per diluted share, for its fiscal fourth quarter ended March 31, 2022 (“Current Quarter”) on operating revenues of $275.6 million compared to net loss attributable to the Company of $0.1 million, or $0.00 per diluted share, for the quarter ended December 31, 2021 (“Preceding Quarter”) on operating revenues of $285.0 million.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $26.0 million in the Current Quarter compared to $26.0 million in the Preceding Quarter. EBITDA adjusted to exclude special items and gains or losses on asset dispositions was $35.9 million in the Current Quarter compared to $30.7 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 (loss), the most directly comparable GAAP (as defined below) measure, to EBITDA and Adjusted EBITDA (in thousands) (unaudited).

Three Months Ended

March 31, 2022

December 31, 2021

EBITDA

$                        26,044

$                        26,009

Special items:

  Restructuring costs

$                           2,113

$                                17

  PBH intangible amortization

3,062

3,060

  Merger and integration costs

824

34

  Reorganization items, net

43

29

  Nonrecurring professional services fees

3,796

2,253

$                           9,838

$                           5,393

Adjusted EBITDA

$                        35,882

$                        31,402

  Loss (gain) on disposal of assets

41

(727)

Adjusted EBITDA excluding asset dispositions

$                        35,923

$                        30,675

“We were pleased to announce plans to acquire British International Helicopters Limited (“BIH”), expanding Bristow’s government services offering to the provision of search and rescue and personnel transportation services in the Falkland Islands and establishing an important new relationship with the British Armed Forces,” said Chris Bradshaw, President and CEO of Bristow Group. “Over the last year, Bristow’s world-leading government services business has expanded beyond the important U.K. and U.S. government contracts to also include the Netherlands, the Dutch Caribbean and now the Falkland Islands. Bristow is well-positioned to further expand our government and military services business to additional contracts in existing jurisdictions as well as new countries looking for a trusted and reliable provider of their most critical missions.”

Sequential Quarter Results

Operating revenues in the Current Quarter were $9.4 million lower compared to the Preceding Quarter. Operating revenues from oil and gas services were $5.6 million lower primarily due to lower utilization in the Americas and Africa regions, partially offset by higher revenues in the Europe region. Operating revenues from government services were consistent with the Preceding Quarter. Operating revenues from fixed wing services were $3.7 million lower primarily due to seasonality and lower utilization.

Operating expenses were $4.2 million lower in the Current Quarter primarily due to lower repairs and maintenance expenses.

General and administrative expenses were $0.7 million higher in the Current Quarter primarily due to increased compensation expense and severance costs.

Merger and integration costs were $0.8 million higher in the Current Quarter primarily due to aircraft lease return costs related to the Merger.

Restructuring costs were $2.1 million higher in the Current Quarter primarily due to severance costs in the Africa region.

There were no significant asset dispositions in the Current Quarter. During the Preceding Quarter, the Company sold one fixed wing aircraft and other equipment, resulting in gains of $0.7 million.

Other income, net of $13.0 million in the Current Quarter resulted from foreign exchange gains of $6.0 million, government grants in fixed wing services of $3.8 million, a gain on the sale of inventory of $1.9 million, insurance gains of $0.8 million and a favorable interest adjustment to the Company’s pension liability of $0.6 million. Other income, net of $4.0 million in the Preceding Quarter was primarily related to government grants in fixed wing services of $3.2 million and a favorable interest adjustment to the Company’s pension liability of $0.7 million.

Income tax expense was $3.3 million in the Current Quarter compared to income tax benefit of $1.6 million in the Preceding Quarter. The change in income tax expense in the Current Quarter was driven by the tax impact of net operating losses and valuation allowances on the Company’s net losses and the tax impact of deductible business interest expense.

Full Fiscal Year Results

Bristow reported net loss attributable to the Company of $15.8 million, or loss per diluted share of $(0.55), for the fiscal year ended March 31, 2022 (“Current Year”) on operating revenues of $1.1 billion compared to net loss attributable to the Company of $56.1 million on operating revenues of $1.1 billion for the fiscal year ended March 31, 2021 (“Prior Year”). The net loss in the Prior Year resulted in net earnings per diluted share due to the deemed contribution from conversion of preferred stock included in the income available to shareholders calculation. After the closing of the business combination between Bristow Group Inc. (prior to the business combination, “Old Bristow”) and Era Group Inc. (the “Merger”) on June 11, 2020, the Prior Year includes operating results from legacy Era Group Inc. from June 11, 2020 onwards.

Operating revenues were consistent with the Prior Year. Operating revenues from oil and gas services were $20.3 million lower in the Current Year primarily due to lower utilization in the Africa and Europe regions, partially offset by  the full year benefit of the Merger and higher utilization in the Americas. Operating revenues from government services were $20.7 million higher primarily due to the strengthening of the British pound sterling relative to the U.S. dollar, the benefit of the Merger and higher utilization. Operating revenues from fixed wing services were $11.6 million higher primarily due to higher utilization. Operating revenues from other services were $12.0 million lower primarily due to the end of oil and gas services in Australia and lower part sales.

Operating expenses were $21.7 million higher in the Current Year primarily due to higher fuel expenses, repairs and maintenance and insurance costs. These increases were partially offset by lower leased-in equipment expenses and personnel costs.

General and administrative expenses were $5.8 million higher in the Current Year primarily due to higher professional services fees, insurance costs and the absence of certain government grants related to fixed wing services.

Merger and integration costs, primarily consisting of professional services fees and severance costs related to the Merger, were $3.2 million in the Current Year compared to $42.8 million in the Prior Year.

Restructuring costs, primarily related to severance costs not related to the Merger, were $3.1 million in the Current Year compared to $25.8 million in the Prior Year.

Depreciation and amortization expenses were $4.9 million higher primarily due to the addition of existing assets to the depreciation and amortization calculation in the Current Year.

During the Current Year, the Company recognized a loss on impairment of $24.8 million consisting of $16.0 million related to Petroleum Air Services (“PAS”), $5.9 million related to helicopters held for sale and $2.9 million related to H225 helicopter parts inventory. During the Prior Year, the Company recognized a loss on impairment of $51.9 million related to its investment in Cougar Helicopters Inc. (“Cougar”), $18.7 million related to its investment in Líder Táxi Aéreo S.A. (“Líder”), $12.9 million related to the write down of inventory and $7.8 million related to helicopters that were held for sale.

During the Current Year, the Company sold 10 aircraft and other equipment resulting in a net gain of $1.3 million. During the Prior Year, the Company sold 54 aircraft, five of which were via sales-type leases, and other equipment resulting in cash proceeds of $67.9 million and losses of $8.2 million.

During the Current Year, the Company recognized losses of $1.7 million from its equity method investments compared to earnings of $0.4 million in the Prior Year.

Interest expense was $9.7 million lower in the Current Year primarily due to lower debt balances.

During the Prior Year, in connection with refinancing, the Company repaid existing term loans and redeemed its 7.750% senior unsecured notes due December 15, 2022 (the “7.750% Senior Notes”) and recognized a loss on extinguishment of debt of $28.5 million related to the write off of associated discount balances and early repayment fees.

During the Current Year, the Company recognized expenses of $0.6 million related to reorganization items. During the Prior Year, the Company recognized a gain of $1.6 million related to the release of the rabbi trust which held investments for the Company’s non-qualified deferred compensation plan for the Company’s former executives.

During the Current Year, the Company recognized a loss of $2.0 million on the sale of its subsidiary in Colombia.

During the Prior Year, the Company recognized a $15.4 million gain on the change in fair value of preferred stock derivative liability.

During the Prior Year, the Company recognized a bargain purchase gain of $81.1 million related to the Merger.

Other income, net of $38.5 million in the Current Year primarily consisted of government grants to fixed wing services of $12.4 million, a bankruptcy-related legal settlement of $9.0 million, net foreign exchange gains of $7.0 million, insurance gains of $5.2 million, a favorable interest adjustment to the Company’s pension liability of $2.5 million and a gain on sale of inventory of $1.9 million. Other income, net of $27.5 million in the Prior Year was primarily due to government grants to fixed wing services of $11.5 million, net foreign exchange gains of $7.5 million, a favorable interest adjustment to the Company’s pension liability of $3.8 million and insurance proceeds of $2.6 million.

Income tax expense was $11.3 million in the Current Year compared to income tax benefit of $0.4 million in the Prior Year. The change in income tax expense in the Current Year was driven by the tax impact of net operating losses and valuation allowances on the Company’s net losses, the tax impact of deductible business interest expense, tax impacts of the bankruptcy-related legal settlement and impairment losses, and tax impacts of post-bankruptcy adjustments.

Liquidity and Capital Allocation

As of March 31, 2022, the Company had $263.8 million of unrestricted cash and $54.9 million of remaining availability under its ABL Facility for total liquidity of $318.7 million.

On May 20, 2022, the Company entered into an agreement to amend its existing ABL Facility. The amendment, among other things, extends the maturity to 2027 and includes the ability to increase the total commitments by up to $35.0 million, which would result in an aggregate amount of $120.0 million.

In the Current Quarter, purchases of property and equipment were $7.8 million, and there were no cash proceeds from dispositions of property and equipment. In the Preceding 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. 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 Wednesday, June 1, 2022, to review the results for the fiscal fourth quarter ended March 31, 2022. The conference call can be accessed as follows:

All callers will need to reference the access code 3580940

Within the U.S.: Operator Assisted Toll-Free Dial-In Number: (800) 289-0571

Outside the U.S.: Operator Assisted International Dial-In Number: (856) 344-9290

Replay

A telephone replay will be available through June 10, 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 June 10, 2022. The accompanying investor presentation will be available on June 1, 2022, on Bristow’s website at www.bristowgroup.com.

For additional information concerning Bristow, contact Jennifer Whalen at InvestorRelations@bristowgroup.com, (713) 369-4636 or visit Bristow Group’s website at https://ir.bristowgroup.com/.

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