vtol-20201231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________________________

FORM 10-Q

________________________________________

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	December 31, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission File Number

001-35701

Bristow Group Inc.

(Exact name of registrant as specified in its charter)


Delaware		72-1455213
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

3151 Briarpark Drive, Suite 700
Houston,	Texas	77042
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code:

(713) 267-7600


None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VTOL	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

☑

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

The total number of shares of common stock, par value $0.01 per share, outstanding as of January 29, 2021 was 29,710,476. The Registrant has no other class of common stock outstanding.

BRISTOW GROUP INC.

INDEX


PART I. Financial Information			1

	Item 1.	Financial Statements (Unaudited)	1

		Condensed Consolidated Statements of Operations	1

		Condensed Consolidated Statements of Comprehensive Income	3

		Condensed Consolidated Balance Sheets	4

		Condensed Consolidated Statements of Cash Flows	5

		Condensed Consolidated Statements of Changes in Stockholders’ Investment and Mezzanine Equity	6

		Notes to Condensed Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

	Item 4.	Controls and Procedures	51

PART II. Other Information			52

	Item 1.	Legal Proceedings	53

	Item 1A.	Risk Factors	53

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities	56

	Item 3.	Defaults Upon Senior Securities	56

	Item 4.	Mine Safety Disclosures	56

	Item 5.	Other Information	56

	Item 6.	Exhibits	56

		Signatures	57

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended December 31, 2020		Two Months Ended December 31, 2019		One Month Ended October 31, 2019
	Successor				Predecessor
Revenues:
Operating revenues	$	300,275	$	193,322	$	101,659
Reimbursable revenues	9,622		7,602		4,168
Total revenues	309,897		200,924		105,827

Costs and expenses:
Operating expenses	228,246		158,845		79,802
Reimbursable expenses	9,525		7,707		4,049
General and administrative expense	37,931		25,358		15,965
Merger-related costs	4,450		318		—
Depreciation and amortization expense	17,931		11,926		8,222
Total costs and expenses	298,083		204,154		108,038

Loss on impairment	(53,249)		—		—
Gain (loss) on disposal of assets	1,951		(154)		249
Earnings from unconsolidated affiliates, net of losses	896		1,499		3,609
Operating income (loss)	(38,588)		(1,885)		1,647

Interest income	359		202		165
Interest expense	(13,203)		(9,674)		(79,235)
Reorganization items, net	1,984		—		(447,674)

Change in fair value of preferred stock derivative liability	—		(133,315)		—

Other, net	5,635		3,729		7,009
Total other income (expense)	(5,225)		(139,058)		(519,735)
Loss before income taxes	(43,813)		(140,943)		(518,088)
Benefit (provision) for income taxes	(13,447)		(11,600)		13,889
Net loss	(57,260)		(152,543)		(504,199)
Net loss attributable to noncontrolling interests	139		31		5
Net loss attributable to Bristow Group Inc.	$	(57,121)	$	(152,512)	$	(504,194)
Loss per common share(1):
Basic	$	(1.97)	$	(14.49)	$	(14.04)
Diluted	$	(1.97)	$	(14.49)	$	(14.04)
Weighted average common shares outstanding(1):
Basic	28,944,908		11,235,535		35,918,916
Diluted	28,944,908		11,235,535		35,918,916

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share amounts)


	Nine Months Ended December 31, 2020		Two Months Ended December 31, 2019		Seven Months Ended October 31, 2019
	Successor				Predecessor
Revenues:
Operating revenues	$	857,505	$	193,322	$	722,919
Reimbursable revenues	27,225		7,602		34,304
Total revenues	884,730		200,924		757,223

Costs and expenses:
Operating expenses	650,635		158,845		574,216
Reimbursable expenses	27,092		7,707		33,023
Prepetition restructuring charges	—		—		13,476
General and administrative expenses	112,722		25,358		88,555
Merger-related costs	26,367		318		—
Depreciation and amortization expense	52,824		11,926		70,864
Total costs and expenses	869,640		204,154		780,134

Loss on impairment	(90,078)		—		(62,101)
Loss on disposal of assets	(1,000)		(154)		(3,768)
Earnings from unconsolidated affiliates, net of losses	866		1,499		6,589
Operating loss	(75,122)		(1,885)		(82,191)

Interest income	1,055		202		822
Interest expense	(39,152)		(9,674)		(128,658)
Reorganization items, net	1,984		—		(617,973)
Loss on sale of subsidiaries	—		—		(55,883)
Change in fair value of preferred stock derivative liability	15,416		(133,315)		—
Gain on bargain purchase	81,093		—		—
Other, net	19,613		3,729		(3,501)
Total other income (expense)	80,009		(139,058)		(805,193)
Income (loss) before income taxes	4,887		(140,943)		(887,384)
Benefit (provision) for income taxes	(18,736)		(11,600)		51,178
Net loss	(13,849)		(152,543)		(836,206)
Net (income) loss attributable to noncontrolling interests	343		31		(208)
Net loss attributable to Bristow Group Inc.	$	(13,506)	$	(152,512)	$	(836,414)
Income (loss) per common share(1):
Basic	$	5.15	$	(14.49)	$	(23.29)
Diluted	$	3.58	$	(14.49)	$	(23.29)
Weighted average common shares outstanding(1):
Basic	23,178,914		11,235,535		35,918,916
Diluted	32,375,532		11,235,535		35,918,916

(1) See Note 11 to the condensed consolidated financial statements for details on income (loss) per share and weighted average common shares outstanding.

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in thousands)


	Three Months Ended December 31, 2020		Two Months Ended December 31, 2019		One Month Ended October 31, 2019
	Successor				Predecessor

Net loss	$	(57,260)	$	(152,543)	$	(504,199)
Other comprehensive income (loss):
Currency translation adjustments	27,713		8,253		18,387

Unrealized loss on cash flow hedges, net of tax benefit	(1,232)		(902)		(2,280)
Total comprehensive loss	(30,779)		(145,192)		(488,092)

Net loss attributable to noncontrolling interests	139		31		5
Currency translation adjustments attributable to noncontrolling interests	(8)		(2)		28
Total comprehensive loss attributable to noncontrolling interests	131		29		33
Total comprehensive loss attributable to Bristow Group Inc.	$	(30,648)	$	(145,163)	$	(488,059)


	Nine Months Ended December 31, 2020		Two Months Ended December 31, 2019		Seven Months Ended October 31, 2019
	Successor				Predecessor

Net loss	$	(13,849)	$	(152,543)	$	(836,206)
Other comprehensive income (loss):
Currency translation adjustments	46,199		8,253		22,952

Unrealized loss on cash flow hedges, net of tax benefit	(3,396)		(902)		(682)
Total comprehensive income (loss)	28,954		(145,192)		(813,936)

Net (income) loss attributable to noncontrolling interests	343		31		(208)
Currency translation adjustments attributable to noncontrolling interests	(9)		(2)		52
Total comprehensive (income) loss attributable to noncontrolling interests	334		29		(156)
Total comprehensive income (loss) attributable to Bristow Group Inc.	$	29,288	$	(145,163)	$	(814,092)

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share amounts)



	December 31, 2020		March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	293,530	$	196,662
Restricted cash	4,303		2,459
Accounts receivable	231,587		180,683

Inventories	97,422		82,419
Assets held for sale	17,531		32,401
Prepaid expenses and other current assets	31,516		29,527
Total current assets	675,889		524,151



Property and equipment	1,099,878		901,314
Accumulated depreciation and amortization	(71,249)		(24,560)
Property and equipment, net	1,028,629		876,754
Investment in unconsolidated affiliates	38,368		110,058
Right-of-use assets	266,651		305,962

Other assets	126,245		128,336
Total assets	$	2,135,782	$	1,945,261
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable	$	63,161	$	52,110
Accrued wages, benefits and related taxes	59,459		42,852
Income taxes payable and other accrued taxes	19,656		6,326

Deferred revenue	8,561		12,053
Accrued maintenance and repairs	24,601		31,072
Current portion of operating lease liabilities	81,400		81,484
Accrued interest and other accrued liabilities	20,984		26,342
Short-term borrowings and current maturities of long-term debt	48,069		45,739
Total current liabilities	325,891		297,978
Long-term debt, less current maturities	568,368		515,385
Accrued pension liabilities	4,260		17,855
Preferred stock embedded derivative	—		286,182
Other liabilities and deferred credits	7,410		4,490
Deferred taxes	65,355		22,775
Long-term operating lease liabilities	183,994		224,595
Total liabilities	1,155,278		1,369,260
Commitments and contingencies (Note 8)
Redeemable noncontrolling interests	1,453		—
Mezzanine equity preferred stock: $0.0001 par value, 6,824,582 issued and outstanding as of March 31, 2020 (1)	—		149,785
Stockholders’ investment:
Common stock, $0.01 par value, 110,000,000 authorized; 29,710,476 and 11,235,566 outstanding as of December 31 and March 31, 2020, respectively (1)	303		1
Additional paid-in capital	685,575		295,897
Retained earnings	269,600		139,228
Treasury shares, at cost; 449,015 shares as of December 31, 2020	(10,007)		—
Accumulated other comprehensive income (loss)	34,153		(8,641)
Total Bristow Group Inc. stockholders’ investment	979,624		426,485
Noncontrolling interests	(573)		(269)
Total stockholders’ investment	979,051		426,216
Total liabilities, mezzanine equity and stockholders’ investment	$	2,135,782	$	1,945,261

(1) Share information displayed as of March 31, 2020 does not take into account the impact of the Merger.

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Nine Months Ended December 31, 2020		Two Months Ended December 31, 2019			Seven Months Ended October 31, 2019
	Successor					Predecessor
Cash flows from operating activities:
Net loss	$	(13,849)	$	(152,543)		$	(836,206)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	68,325		11,926			70,864
Deferred income taxes	8,312		8,344			(62,476)
Loss from extinguishment of debt	844		—			—
Write-off of deferred financing fees	—		—			4,038
Discount amortization on long-term debt	12,823		2,704			1,563
Reorganization items, net	(1,984)		(16,254)			552,304
Loss on disposal of assets	1,000		154			3,768
Loss on impairment	90,078		—			62,101
Loss on sale of subsidiaries	—		—			55,883
Deferral of lease payments	—		—			285
Beneficial conversion feature on DIP Loan	—		—			56,870
DIP Claim Liability	—		—			15,000
Gain on bargain purchase	(81,093)		—			—
Change in fair value of preferred stock derivative liability	(15,416)		133,315			—
Stock-based compensation expense	9,377		1,483			1,871
Equity in earnings from unconsolidated affiliates less than (greater than) dividends received	2,700		(120)			(1,776)
Increase (decrease) in cash resulting from changes in:
Accounts receivable	24,942		11,410			(10,247)
Inventory, prepaid expenses and other assets	(3,060)		10,293			(1,831)
Accounts payable, accrued expenses and other liabilities	(42,930)		(25,975)			(10,877)
Net cash provided by (used in) operating activities	60,069		(15,263)			(98,866)
Cash flows from investing activities:
Capital expenditures	(11,232)		(32,142)			(41,574)
Proceeds from asset dispositions	66,501		204			5,314

Cash transferred in sale of subsidiaries, net of cash received	—		—			(22,458)
Increase in cash from Era merger	120,236		—		0	—
Net cash provided by (used in) investing activities	175,505		(31,938)			(58,718)
Cash flows from financing activities:
Proceeds from borrowings	—		—			225,585
Debt issuance costs	—		—			(14,863)
Repayment of debt and debt redemption premiums	(126,231)		(5,629)			(366,750)
Partial prepayment of put/call obligation	—		—			(1,323)
Issuance of common and preferred stock	—		—			385,000
Purchase of treasury shares	(10,007)		—			—




Old Bristow share repurchases	(4,807)		—			—
Net cash provided by (used in) financing activities	(141,045)		(5,629)			227,649
Effect of exchange rate changes on cash, cash equivalents and restricted cash	4,183		(1,613)			2,406
Net increase (decrease) in cash, cash equivalents and restricted cash	98,712		(54,443)			72,471
Cash, cash equivalents and restricted cash at beginning of period	199,121		250,526			178,055
Cash, cash equivalents and restricted cash at end of period	$	297,833	$	196,083		$	250,526
Cash paid during the period for:
Interest	$	25,641	$	7,238		$	41,400
Income taxes	$	13,029	$	1,866		$	9,493

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Investment and Mezzanine Equity

(Unaudited)

(In thousands, except share amounts)


					Total Bristow Group Inc. Stockholders’ Investment
	Redeemable Noncontrolling Interests		Mezzanine Equity Preferred Stock		Common Stock		Common Stock (Shares)(1)		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interests		Total Stockholders’ Investment
March 31, 2020 (Successor)	$	—	$	149,785	$	1	11,235,566		$	295,897	$	139,228	$	(8,641)	$	—	$	(269)	$	426,216
Share repurchases	—		(2,151)		—		(142,721)		—		1,263		—		—		—		1,263
Preferred stock share conversion	—		(146,448)		4		34,836,688		270,678		142,614		—		—		—		413,296
Elimination of Old Bristow stock	—		—		(5)		(45,929,533)		5		—		—		—		—		—
Exchange of common stock	—		—		231		23,026,894		(231)		—		—		—		—		—
Era purchase price	—		—		72		7,175,029		108,268		—		—		—		—		108,340
Preferred stock compensation activity and conversion	—		(1,186)		—		—		6,370		—		—		—		—		6,370

Purchase of Company common stock (tax withholding)	—		—		—		(42,199)		—		—		—		—		—		—
Currency translation adjustments	—		—		—		—		—		—		—		—		13		13
Net income (loss)	—		—		—		—		—		71,477		—		—		(73)		71,404
Other comprehensive income	—		—		—		—		—		—		2,278		—		—		2,278
June 30, 2020 (Successor)	—		—		303		30,159,724		680,987		354,582		(6,363)		—		(329)		1,029,180
Share award amortization			—		—		—		2,008		—		—		—		—		2,008
Purchase of treasury shares	—		—		—		(345,757)		—		—		—		(7,579)		—		(7,579)
Era purchase price adjustment	1,501		—		—		(233)		395		—		—		—		—		395
Currency translation adjustments	—		—		—		—		—		—		—		—		(14)		(14)
Net loss	(18)		—		—		—		—		(27,861)		—		—		(113)		(27,974)
Other comprehensive income	—		—		—		—		—		—		14,043		—		—		14,043
September 30, 2020 (Successor)	1,483		—		303		29,813,734		683,390		326,721		7,680		(7,579)		(456)		1,010,059
Share award amortization	—		—		—		—		2,185		—		—		—		—		2,185
Purchase of treasury shares	—		—		—		(103,258)		—		—		—		(2,428)		—		(2,428)

Currency translation adjustments	—		—		—		—		—		—		—		—		(8)		(8)
Net loss	(30)		—		—		—		—		(57,121)		—		—		(109)		(57,230)
Other comprehensive income	—		—		—		—		—		—		26,473		—		—		26,473
December 31, 2020 (Successor)	$	1,453	$	—	$	303	$	29,710,476	$	685,575	$	269,600	$	34,153	$	(10,007)	$	(573)	$	979,051

(1) Certain shares were reclassified out of common stock issued and into unissued.

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Investment and Mezzanine Equity

(Unaudited)

(In thousands, except share amounts)


	Total Bristow Group Inc. Stockholders’ Investment
	Common Stock		Common Stock (Shares)	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interests	Total Stockholders’ Investment	Mezzanine equity preferred stock
March 31, 2019 (Predecessor)	$	386	35,918,916	$	862,020	$	455,598	$	(327,989)	$	(184,796)