Bristow Group Reports Financial Results for Its 2011 First Fiscal Quarter Ended June 30, 2010

HOUSTON, Aug. 4 /PRNewswire-FirstCall/ -- 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 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.


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:

    --  $1.4 billion in stockholders' investment and $711.5 million of
    --  $73.9 million in cash and a $100 million undrawn revolving credit
        facility, and
    --  $81 million in aircraft purchase commitments for seven aircraft.


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  The conference call can be accessed as follows:

Via Webcast:

    --  Visit Bristow Group's investor relations Web page at
    --  Live: Click on the link for "Bristow Group Fiscal 2011 First 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

Via Telephone within the U.S.:

    --  Live: Dial toll free 1-877-941-9205
    --  Replay: A telephone replay will be available through August 19, 2010 and
        may be accessed by calling toll free 1-800-406-7325, passcode: 4330736#

Via Telephone outside the U.S.:

    --  Live: Dial 480-629-9866
    --  Replay: A telephone replay will be available through August 19, 2010 and
        may be accessed by calling 303-590-3030, passcode: 4330736#


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


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)

(In thousands, except per share amounts)

                                                       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

(In thousands)

                                                      June 30,     March 31,

                                                      2010         2010



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


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

(In thousands)

                                                    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

 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

(In thousands, except flight hours and percentages)

                                           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     %

AS OF JUNE 30, 2010

               Aircraft in Consolidated Fleet


                                               Fixed  Total  Unconsolidated
               Small  Medium  Large  Training  Wing   (1)    Affiliates(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

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.


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

                              Three Months Ended

                              June 30,

                              2010       2009


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

SOURCE Bristow Group Inc.