BRISTOW GROUP REPORTS STRONG FINANCIAL PERFORMANCE FOR ITS 2011 FOURTH QUARTER AND FISCAL YEAR ENDED MARCH 31, 2011
- FOURTH QUARTER EPS OF $1.00 AND FISCAL YEAR EPS OF $3.30, BOTH EXCLUDING SPECIAL ITEMS
- FOURTH QUARTER GAAP EPS OF $0.84 AND FISCAL YEAR GAAP EPS OF $3.60
- FOURTH QUARTER OPERATING INCOME OF $49.8 MILLION, A 16% INCREASE OVER THE PRIOR YEAR QUARTER DUE TO OPERATIONAL IMPROVEMENT IN THE EUROPE AND OTHER INTERNATIONAL BUSINESS UNITS
- COMPANY INITIATES DIVIDEND OF $0.15 PER SHARE FOR THE FIRST QUARTER OF FISCAL YEAR 2012
- COMPANY INITIATES FISCAL YEAR 2012 DILUTED EPS GUIDANCE
HOUSTON, May 10, 2011 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported adjusted net income, excluding special items, for the fourth quarter ended March 31, 2011 of $37.0 million, or $1.00 per diluted share, compared to $26.6 million, or $0.73 per diluted share in the same period a year ago. GAAP net income for the fourth quarter was $30.9 million, or $0.84 per diluted share. The quarter benefited from operating improvement in the Europe and Other International Business Units as well as increased earnings from unconsolidated affiliates and higher aircraft sales. The special items referred to herein are detailed on page nine of this news release.
Revenue for the fourth quarter increased 9.8% to $310.1 million from $282.4 million in the same period a year ago. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 30.4% to $77.5 million from $59.4 million in the March 2010 quarter. Revenue was positively impacted by improvement in the underlying operations in the Europe, Australia and Other International Business Units.
"As previously anticipated, the financial results for the second half of the year exceeded the first half. We were able to deliver sequential improvement in operating income, EBITDA and earnings per share in the fourth quarter," said William E. Chiles, President and Chief Executive Officer of Bristow Group. "The performance of several of our business units during the quarter was strong and our operating margin improved to 16.1%, driven by continued excellent results in our Europe and Other International Business Units."
On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share on the issued and outstanding shares of common stock.
"We are proud to announce our Board's decision to initiate a quarterly cash dividend on our common stock," said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. "Our confidence in Bristow's ability to generate cash flow, while growing the business across the globe and maintaining a prudent financial profile, allows us to create an exceptional investment opportunity."
Adjusted net income, excluding special items, for the fiscal year ended March 31, 2011 totaled $121.3 million, or $3.30 per diluted share, compared to $109.1 million, or $3.02 per diluted share in the same period a year ago. GAAP net income for the fiscal year ended March 31, 2011 was $132.3 million, or $3.60 per diluted share, and revenue totaled $1.233 billion. Revenue increased across all primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients in North America. The special items referred to herein are detailed on pages nine and ten of this news release.
"Fiscal 2011 turned out to be a strong year, distinguished by record revenue, operating income and net income," said Bill Chiles. "I am proud of the entire Bristow team, who produced top safety performance while also delivering on our commitment to improving financial performance, lowering cost of capital, and commencing a balanced capital allocation plan. We look forward to carrying this quarter's momentum into fiscal 2012, where the combination of our financial strength and growth opportunities should lead to significant value creation for Bristow's shareholders. In light of these factors and our more stable and predictable business profile, we have decided to provide annual earnings per share guidance starting with fiscal 2012."
FOURTH QUARTER FY2011 RESULTS
-- Revenue increased 9.8% to $310.1 million compared to $282.4 million in
the same period a year ago.
-- Operating income increased 16.5% to $49.8 million compared to $42.8
million in the same period a year ago. Operating margin increased to
16.1% from 15.2% in the fourth quarter of fiscal 2010.
-- EBITDA increased 30.4% to $77.5 million compared to $59.4 million in the
March 2010 quarter.
-- GAAP net income increased 8.5% to $30.9 million, or $0.84 per diluted
share, compared to $28.4 million, or $0.78 per diluted share, in the
March 2010 quarter.
Our Europe Business Unit saw an increase in flying activity over the prior year quarter, which resulted in increased operating margin in this market.
Our West Africa Business Unit was affected by a high level of maintenance and freight costs in the March 2011 quarter. We have been able to re-contract aircraft after the loss of a major contract in this market. We expect to benefit from new contract awards and our continuing effort to reduce aircraft maintenance delays in this market in future periods.
Our North America Business Unit continues to be a challenging market due to the impact of the severe reduction in the issuance of drilling and completion permits in the aftermath of the Macondo accident. In addition, difficult weather conditions in February coupled with the ending of our support work for BP negatively affected this business unit. We are reducing our cost structure in order to align the business with the current level of demand. A few drilling permits were issued during the fourth quarter in the U.S. Gulf of Mexico, and activity has started to pick up very recently.
Our Australia Business Unit saw a significant increase in revenue over the prior year resulting from new contracts and a favorable impact of change in foreign currency exchange rates. However, an increase in compensation and other costs has contributed to a decrease in operating margin versus the same quarter last year. We do not expect some of the costs incurred in the 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 future quarters.
Our Other International Business Unit's operating margin was significantly higher primarily due to strong performance of our unconsolidated affiliate in Brazil, which generated $6.2 million of equity earnings for the three months ended March 31, 2011. We made progress in our exit strategy in Mexico by entering into an agreement to sell our 24% interest in an unconsolidated affiliate to our joint venture partner and reduced our financial exposure to the Mexican market.
During the March 2011 quarter we generated $5.4 million in after-tax gains on the sale of seven aircraft, which included two older generation large aircraft and related inventory.
FISCAL YEAR ENDED MARCH 31, 2011
-- Revenue totaled $1.233 billion compared to $1.168 billion for the same
period a year ago.
-- Operating income was $189.7 million compared to $180.9 million for the
fiscal year ended March 31, 2010.
-- EBITDA totaled $277.5 million compared to $259.6 million for the fiscal
year ended March 31, 2010.
-- GAAP net income totaled $132.3 million, or $3.60 per diluted share,
compared to $112.0 million, or $3.10 per diluted share for the fiscal
year ended March 31, 2010.
Our fiscal year ended March 31, 2011 results benefited from revenue increases across all of our primary business units, with significant improvements in Australia, Europe and Other International compared to the same period a year ago, which was driven by the addition of new contracts and increases in rates on existing contracts, which offset the impact of reduced activity for certain clients.
Operating income, EBITDA, net income and earnings per share increased from the prior year due to higher earnings from unconsolidated affiliates, primarily our investment in Brazil, and improved performance in the Europe, North America and Other International Business Units. Additionally, our effective tax rate was 5.1% versus 20.4% in the prior fiscal year. This reduction was driven by a global restructuring of our operations as part of the continuing implementation of our global business strategy, in addition to a shift of our expected earnings for the current fiscal year to lower tax jurisdictions. This benefit was partially offset by a lower level of aircraft sales, increased interest expense and a reduction in other income (expense), net.
DIVIDEND
On May 4, 2011, the Board of Directors of Bristow declared a first quarter cash dividend of $0.15 per share of our common stock. The dividend will be paid on June 10, 2011 to shareholders of record on May 20, 2011. Based on shares outstanding at March 31, 2011, total dividend payments to be made during the three months ended June 30, 2011 will be approximately $5.4 million.
"We expect to continue generating substantial cash flow after having increased our operating leverage through significant investment in our aircraft fleet. We believe it is now time to return some of the cash flow in the form of a dividend to our shareholders while making our stock more attractive to international and income-oriented investors," said Jonathan Baliff.
"The continued execution of our ongoing capital allocation strategy of investing in our fleet, pursuing other growth opportunities and returning cash to shareholders, while maintaining prudent balance sheet management, should provide additional certainty about our financial strength that has allowed us to initiate this dividend."
GUIDANCE
Bristow issued today diluted earnings per share guidance for fiscal year 2012 of $3.55 to $3.90.
"Our 2012 guidance demonstrates our confidence in our business model anchored by our contract structure and our clients' focus on production," said Jonathan Baliff. "This makes our operating performance more stable and predictable. This 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. Our objectives in providing earnings guidance include aligning shareholders and other market participants with management's expectation of our operational performance and how management directs and operates our business."
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 Wednesday, May 11, to review financial results for the fiscal year 2011 fourth quarter and year-ended March 31, 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:
-- Visit Bristow Group's investor relations Web page at
www.bristowgroup.com
-- Live: Click on the link for "Bristow Group Fiscal 2011 Fourth 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
days
Via Telephone within the U.S.:
-- Live: Dial toll free 1-877-941-8609
-- Replay: A telephone replay will be available through May 25, 2011 and
may be accessed by calling toll free 1-800-406-7325, passcode: 4435513#
Via Telephone outside the U.S.:
-- Live: Dial 480-629-9818
-- Replay: A telephone replay will be available through May 25, 2011 and
may be accessed by calling 303-590-3030, passcode: 4435513#
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.
FORWARD-LOOKING STATEMENTS DISCLOSURE
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 earnings guidance, capital allocation strategy, future dividends, the impact of activity levels, business performance, 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 December 31, 2010 and the 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)
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
March 31, March 31,
2011 2010 2011 2010
Gross revenue:
Operating revenue from
non-affiliates $ 263,118 $ 241,809 $ 1,051,829 $ 999,249
Operating revenue from
affiliates 10,625 15,199 63,067 61,842
Reimbursable revenue from
non-affiliates 36,452 24,805 117,366 103,019
Reimbursable revenue from
affiliates (53) 570 546 3,646
310,142 282,383 1,232,808 1,167,756
Operating expense:
Direct cost 188,842 173,653 748,053 717,178
Reimbursable expense 34,542 24,673 114,288 105,853
Depreciation and
amortization 29,240 17,365 90,877 74,684
General and administrative 25,013 30,455 120,145 119,701
277,637 246,146 1,073,363 1,017,416
Gain on disposal of other
assets 6,596 5,328 10,178 18,665
Earnings from
unconsolidated affiliates,
net of
losses 10,746 1,227 20,101 11,852
Operating Income 49,847 42,792 189,724 180,857
Interest income 215 215 1,092 1,012
Interest expense (9,924) (10,781) (46,187) (42,412)
Other income (expense),
net (1,842) (987) (4,230) 3,036
Income from continuing
operations before
provision for income taxes 38,296 31,239 140,399 142,493
Provision for income taxes (7,071) (2,571) (7,104) (28,998)
Net income from continuing
operations 31,225 28,668 133,295 113,495
Net income attributable to
noncontrolling
interests (357) (225) (980) (1,481)
Net income attributable to
Bristow Group 30,868 28,443 132,315 112,014
Preferred stock dividends — — — (6,325)
Net income available to
common
stockholders $ 30,868 $ 28,443 $ 132,315 $ 105,689
Earnings per common share:
Basic $ 0.85 $ 0.79 $ 3.67 $ 3.23
Diluted $ 0.84 $ 0.78 $ 3.60 $ 3.10
Weighted average number of
common shares
outstanding:
Basic 36,312 35,942 36,010 32,729
Diluted 36,966 36,335 36,731 36,119
EBITDA $ 77,460 $ 59,385 $ 277,463 $ 259,589
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Ended Fiscal Year Ended
March 31, March 31,
2011 2010 2011 2010
Flight hours (excludes
Bristow Academy and
unconsolidated
affiliates):
Europe 13,388 11,843 54,463 54,537
West Africa 9,173 8,547 38,390 35,142
North America 16,741 18,301 81,503 79,345
Australia 3,825 3,324 13,618 12,302
Other International 10,423 10,704 45,894 44,373
Consolidated total 53,550 52,719 233,868 225,699
Gross revenue:
Europe $ 127,341 $ 104,730 $ 476,455 $ 452,998
West Africa 55,244 54,207 226,175 219,212
North America 40,124 45,453 193,845 189,730
Australia 45,025 34,014 159,120 130,698
Other International 37,260 32,080 148,239 135,426
Corporate and other 7,561 12,173 33,217 43,815
Intrasegment eliminations (2,413) (274) (4,243) (4,123)
Consolidated total $ 310,142 $ 282,383 $ 1,232,808 $ 1,167,756
Operating income (loss):
Europe $ 23,939 $ 18,973 $ 89,320 $ 77,053
West Africa 13,262 18,770 62,051 62,410
North America (1,602) 1,002 14,527 11,655
Australia 7,812 8,349 28,997 30,374
Other International 17,076 601 42,038 25,972
Gain on disposal of other
assets 6,596 5,328 10,178 18,665
Corporate and other (17,236) (10,231) (57,387) (45,272)
Consolidated total $ 49,847 $ 42,792 $ 189,724 $ 180,857
Operating margin:
Europe 18.8 % 18.1 % 18.7 % 17.0 %
West Africa 24.0 % 34.6 % 27.4 % 28.5 %
North America (4.0) % 2.2 % 7.5 % 6.1 %
Australia 17.4 % 24.5 % 18.2 % 23.2 %
Other International 45.8 % 1.9 % 28.4 % 19.2 %
Consolidated total 16.1 % 15.2 % 15.4 % 15.5 %
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
AS OF MARCH 31, 2011
Aircraft in Consolidated Fleet
Helicopters
Unconsolidated
Fixed
Small Medium Large Training Wing Total (1) Affiliates(2) Total
Europe — 17 39 — — 56 63 119
West Africa 12 27 6 — 3 48 — 48
North America 70 25 2 — — 97 — 97
Australia 2 14 16 — — 32 — 32
Other
International 5 44 15 — — 64 133 197
Corporate and
other — — — 76 — 76 — 76
Total 89 127 78 76 3 373 196 569
Aircraft not
currently in
fleet: (3)
On order — — 6 — — 6
Under option — 22 9 — — 31
(1) Includes 16 aircraft held for sale.
The 196 aircraft operated or managed by our unconsolidated affiliates are
(2) in addition to those aircraft leased from us.
This table does not reflect aircraft which our unconsolidated affiliates
(3) may have on order or under option.
GAAP RECONCILIATIONS
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 from continuing operations, the most comparable GAAP financial measure to EBITDA, is as follows (in thousands):
Three Months Ended Fiscal Year Ended
March 31, March 31,
2011 2010 2011 2010
(Unaudited)
Net income from continuing
operations $ 31,225 $ 28,668 $ 133,295 $ 113,495
Provision for income taxes 7,071 2,571 7,104 28,998
Interest expense 9,924 10,781 46,187 42,412
Depreciation and amortization 29,240 17,365 90,877 74,684
EBITDA $ 77,460 $ 59,385 $ 277,463 $ 259,589
A reconciliation of our operating income, EBITDA, net income and diluted earnings per share as adjusted for the special items described below to each of these items as reported under GAAP is as follows:
March 2011 Quarter
Diluted
Earnings
Operating Income EBITDA Net Income Per Share
(Unaudited)
(In thousands, except per share amounts)
Adjusted for special items $ 56,653 $ 79,905 $ 37,001 $ 1.00
Impairment of IT system
(1) (5,306) — (3,449) (0.09)
Held for sale aircraft
impairment (2) (1,500) — (1,095) (0.03)
Impairment of investment
in
affiliate (3) — (2,445) (1,589) (0.04)
As reported $ 49,847 $ 77,460 $ 30,868 0.84
March 2010 Quarter
Diluted
Earnings
Operating Income EBITDA Net Income Per Share
(Unaudited)
(In thousands, except per share amounts)
Adjusted for special items $ 39,920 $ 60,385 $ 26,630 $ 0.73
Allowance for receivables
(4) (2,200) (2,200) (1,430) (0.04)
Depreciation correction
(5) 3,872 — 2,463 0.07
Australia local tax (6) 1,200 1,200 780 0.02
As reported $ 42,792 $ 59,385 $ 28,443 0.78
Fiscal Year Ended
March 31, 2011
Diluted
Earnings
Operating Income EBITDA Net Income Per Share
(Unaudited)
(In thousands, except per share amounts)
Adjusted for special items $ 193,030 $ 278,708 $ 121,285 $ 3.30
Impairment of IT system
(1) (5,306) — (3,449) (0.09)
Held for sale aircraft
impairment (2) (1,500) — (1,095) (0.03)
Impairment of investment
in
affiliate (3) — (2,445) (1,589) (0.04)
Power-by-the-hour credit
(7) 3,500 3,500 2,520 0.07
Retirement of 6 1/8%
Senior
Notes (8) — (2,300) (3,055) (0.08)
Income tax items (9) — — 17,698 0.48
As reported $ 189,724 $ 277,463 $ 132,315 3.60
Fiscal Year Ended
March 31, 2010
Diluted
Earnings
Operating Income EBITDA Net Income Per Share
(Unaudited)
(In thousands, except per share amounts)
Adjusted for special items $ 181,540 $ 259,586 $ 109,114 $ 3.02
Allowance for receivables
(10) (1,100) (1,100) (715) (0.02)
Depreciation correction
(5) 3,250 — 2,898 0.08
Australia local tax (6) 2,041 2,041 1,327 0.04
Departure of officers (11) (4,874) (4,874) (3,168) (0.09)
Hedging gains (12) — 3,936 2,558 0.07
As reported $ 180,857 $ 259,589 $ 112,014 3.10
(1) Represents additional depreciation expense recorded as a result of the
impairment of previously capitalized internal software costs as the
related project was abandoned in the March 2011 quarter.
(2) Represents additional depreciation expense recorded as a result of the
impairment of three held for sale aircraft in the March 2011 quarter.
(3) Represents a charge recorded as a reduction in other income (expense), net
related to the impairment of our 24% investment in Heliservicio, an
unconsolidated affiliate in Mexico, resulting from a pending sale of the
investment.
(4) Represents a $3.6 million bad debt allowance recorded for accounts
receivable due from our unconsolidated affiliate in Mexico, which we
determined were not probable of collection, which was partially offset by
a $1.4 million reduction in a bad debt allowance for accounts receivable
due from a client in Nigeria; these items are included in direct cost.
(5) Represents a reduction in depreciation expense recorded in the March 2010
quarter for errors in the calculation of depreciation on certain aircraft
in prior periods.
(6) Represents a net expense reduction in Australia upon resolution of local
tax matters in the March 2010 quarter that reduced direct costs and in
fiscal year ended March 31, 2010 that reduced direct cost by $1.1 million
and general and administrative expense by $0.9 million.
(7) Represents a reduction in maintenance expense (included in direct cost)
associated with a credit resulting from the renegotiation of a
"power-by-the-hour" contract for aircraft maintenance with a third party
provider.
(8) Represents to impact from the early retirement of the 6 1/2% Senior Notes,
which resulted in a $2.3 million early redemption premium (included in
other income (expense), net) and the non-cash write-off of $2.4 million of
unamortized debt issuance costs (included in interest expense).
(9) Represents the impact of a reduction in the provision for income taxes
related to adjustments to deferred tax liabilities that were no longer
required as a result of a restructuring during the fiscal year ended March
31, 2011.
(10) Represents a $3.6 million bad debt allowance recorded for accounts
receivable due from our unconsolidated affiliate in Mexico, which we
determined were not probable of collection, which was partially offset by
a $2.5 million reduction in a bad debt allowance for accounts receivable
due from a client in Kazakhstan; these items are included in direct cost.
(11) Represents compensation costs associated with the departure of three of
the Company's officers during the fiscal year ended March 31, 2010; these
costs are included in general and administrative costs.
(12) Represents the impact of pre-tax hedging gains of $3.9 million realized
during the fiscal year ended March 31, 2010 due to termination of forward
contracts on euro-denominated aircraft purchase commitments; these gains
are included in other income (expense), net.
SOURCE Bristow Group Inc.
Released May 10, 2011