Bristow Group Reports Financial Results for its 2011 Second Fiscal Quarter and Six-Month Period Ended September 30, 2010

- $1.06 diluted EPS on net income of $38.9 million, up approximately 17% over the prior year quarter.

- $312.6 million in revenue, a 7% increase over the prior year quarter due to operational improvement in Australia, West Africa, Europe and North America.

- Completion of global restructuring of Bristow's operations as part of the continuing implementation of our global business strategy, significantly lowering our effective tax rate.

HOUSTON, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Bristow Group Inc. (NYSE: BRS) today reported net income for the three months ended September 30, 2010 of $38.9 million, or $1.06 per diluted share, compared to $33.2 million, or $0.92 per diluted share, in the September 2009 quarter.  The quarter benefited from sequential improvement in the underlying operations and a significant reduction in the effective tax rate, which was driven by a global restructuring of Bristow's operations as part of the continuing implementation of our global business strategy, in addition to a shift of expected earnings for the current fiscal year to lower tax jurisdictions.

Revenue for the three months ended September 30, 2010 totaled $312.6 million compared to $291.6 million in same period a year ago.  Earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $74.6 million compared to $74.1 million in the September 2009 quarter.  Results benefited from revenue increases in Australia, West Africa, North America and Europe compared to the same quarter a year ago, driven by the addition of new contracts and increases in both price and activity for certain customers.  These increases were partially offset by a lower level of gain on disposal of assets year-over-year and higher compensation costs in Australia and Nigeria.  

"We are pleased with our higher fiscal second quarter results as we were able to deliver sequential improvement in both revenue and earnings," said William E. Chiles, President, Chief Executive Officer of Bristow Group.  "The underlying performance of our operations was strong and the operating margins improved sequentially in several of our business units including Europe, West Africa, North America and Other International.  Our global restructuring has also benefited shareholders by aligning our corporate structure with how we do business, significantly lowering our effective tax rate. The expected amendment to our credit facility improves our liquidity position and increases capital structure flexibility while lowering the overall cost of debt. These efforts demonstrate the Bristow team's commitment to lower our cost of capital.

"As previously disclosed, we continue to expect revenue and earnings per share for the current fiscal year to be stronger than fiscal year 2010 as additional newer-technology aircraft go to work for our customers and we relentlessly focus on improving returns and lowering our after tax cost of capital.  We continue to anticipate a much stronger second half compared to the first half of fiscal year 2011," Chiles added.

SECOND QUARTER FY2011 RESULTS

    --  Revenue totaled $312.6 million compared to $291.6 million in same period
        a year ago.
    --  Operating income remained flat at $53.6 million.
    --  EBITDA totaled $74.6 compared to $74.1 million in the September 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 $38.9 million, or $1.06 per diluted share, compared
        to $33.2 million, or $0.92 per diluted share, in the September 2009
        quarter.


Net income and earnings per share increased due to a significant reduction in our effective tax rate, which was 7.9% versus 25.0% in the September 2009 quarter.  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 increased interest expense and lower foreign currency transaction and hedging gains.  

Our Europe business unit added two new customers and saw an increase in activity over the prior year quarter, which along with higher equity earnings from our military training unconsolidated affiliate, FB Heliservices Limited, increased our operating margin in this market.

Our North America business unit continued to benefit during the quarter from contracts with BP in the U.S. Gulf of Mexico, where nine of our aircraft were supporting the well control and spill cleanup efforts at the end of September.  While we can't predict how long this work will continue, for the past two quarters the new work more than offset lost business from customers stalled by the deep-water moratorium, which has now been lifted.  Subsequent to September 30, 2010, this work has continued to wind down.

Our West Africa business unit also benefitted from new contracts and rate escalations on existing contracts in excess of lost work with certain existing customers.  We have also benefitted from a continued effort to reduce aircraft maintenance delays in this market, which reduced the number of days our aircraft were grounded during the quarter.  Despite the revenue improvement, our operating margin remained relatively flat versus the prior year quarter as we incurred severance costs for employees that had been supporting a major contract that finished in September.  We are continuing to seek permanent work to replace the earnings associated with this contract.

Our Australia business unit saw a significant increase in revenue over the prior year quarter resulting from new contracts and a favorable impact of change in foreign currency exchange rates.  However, as a result of an increase in annual leave and long service leave provisions in this market, compensation costs have increased contributing to a decrease in operating margin versus the same quarter last year.

Our Other International business unit's operating margin was lower primarily due to reduced earnings in Kazakhstan as we stopped operating in this market in a year ago and the Comparable Quarter included a $2.5 million reversal of a bad debt provision.  Our results for our unconsolidated affiliate in Brazil totaled $1.8 million for the three months ended September 30, 2010, which were also reduced by foreign exchange losses.  These foreign exchange losses partially mask the fact that the normal operations of our affiliate in this market, Lider Aviacao Holding S.A. ("Lider"), have shown significant improvement sequentially over the past several quarters from a revenue and EBITDA standpoint.  Excluding the impact of foreign exchange losses, our equity earnings for Lider would have been approximately $3.8 million for the three months ended September 30, 2010.  The improvement in Lider's normal operations translated into a sequential improvement in quarterly earnings from our investment, which led to higher operating margin for this business unit in the second fiscal quarter compared with the preceding quarter.

During the September 2010 quarter we experienced only modest gains on the sale of a few aircraft and these gains during the quarter were $3.0 million lower than those during the same quarter last year; however, we continue to see opportunities for sale of our aircraft in the aftermarket.  

YEAR-TO-DATE RESULTS THROUGH SEPTEMBER 30, 2010

    --  Revenue totaled $604.8 million compared to $582.1 million for the same
        period a year ago.
    --  Operating income was $93.2 million compared to $98.3 million for the six
        months ended September 30, 2009.
    --  EBITDA totaled $134.4 million compared to $135.8 million for the six
        months ended September 30, 2009.
    --  Net income totaled $59.7 million, or $1.63 per diluted share, compared
        to $56.9 million, or $1.58 per diluted share, for the six months ended
        September 30, 2009.


Our year-to-date results through September 30, 2010 benefitted from revenue increases in Australia, West Africa and North America compared to the same period a year ago, which was driven by the addition of new contracts and increases in rates on existing contracts in excess of reduced activity for certain customers.  

Despite increased revenue, operating income and EBITDA decreased due to a lower level of gain on disposal of assets and reduced earnings in Kazakhstan.  

Net income and earnings per share benefitted from a significant reduction in our effective tax rate, which was 16.6% versus 26.4% for the six months ended September 30, 2009.  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 increased interest expense.  

CAPITAL AND LIQUIDITY

For the six months ended September 30, 2010, net cash generated by operating activities was $69.2 million and net cash used in investing activities was $44.5 million.  At September 30, 2010, we had:

    --  $1.4 billion in stockholders' investment and $720.6 million of
        indebtedness,
    --  $108.5 million in cash and a $100 million undrawn revolving credit
        facility, and
    --  $154.2 million in aircraft purchase commitments for 12 aircraft.


In addition, we are currently negotiating an amendment to our existing bank credit facility to extend the facility for five years and increase the amount financed to $375 million. The facility is expected to consist of a $200 million term loan and a $175 million revolver at an initial expected rate of Libor+250. We expect to use proceeds for general corporate purposes, including repayment of existing indebtedness. Completion of the amendment is subject to reaching agreement on the definitive documentation and satisfaction of customary closing conditions.

CONFERENCE CALL

Management will conduct a conference call starting at 9:00 a.m. ET (8:00 a.m. CT) on Friday, November 5, 2010, to review financial results for the 2011 second quarter.  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 Second 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 1-877-941-1465
    --  Replay: A telephone replay will be available through November 19, 2010
        and may be accessed by calling toll free 1-800-406-7325, passcode:
        4375416#


Via Telephone outside the U.S.:

    --  Live: Dial 480-629-9644
    --  Replay: A telephone replay will be available through November 19, 2010
        and may be accessed by calling 303-590-3030, passcode: 4375416#


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 the impact of activity levels, including the amendment to our credit facility and use of proceeds therefrom, business performance, fiscal 2011 results 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 and six months ended September 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)


BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)



                              Three Months Ended       Six Months Ended
                              September 30,            September 30,

                                2010        2009         2010        2009



Gross revenue:

 Operating revenue from
 non-affiliates               $ 270,053   $ 247,642    $ 524,647   $ 496,533

 Operating revenue from
 affiliates                     16,484      17,460       33,899      32,062

 Reimbursable revenue from
 non-affiliates                 25,933      24,746       45,996      50,599

 Reimbursable revenue from
 affiliates                     89          1,767        255         2,873

                                312,559     291,615      604,797     582,067

Operating expense:

 Direct cost                    189,110     173,392      372,274     354,069

 Reimbursable expense           25,020      26,304       45,198      52,961

 Depreciation and
 amortization                   20,968      18,470       40,299      36,656

 General and administrative     30,515      29,686       61,417      58,488

                                265,613     247,852      519,188     502,174



Gain on disposal of assets      1,897       4,880        3,615       10,889

Earnings from unconsolidated
affiliates, net of losses       4,716       4,924        4,014       7,557

 Operating income               53,559      53,567       93,238      98,339



Interest income                 168         210          460         432

Interest expense                (11,452)    (10,640)     (22,490)    (20,652)

Other income (expense), net     (111)       1,809        404         328

 Income before provision for
 income taxes                   42,164      44,946       71,612      78,447

Provision for income taxes      (3,316)     (11,236)     (11,856)    (20,746)

 Net income                     38,848      33,710       59,756      57,701

 Net income attributable to
 noncontrolling interests       32          (540)        (68)        (808)

 Net income attributable to
 Bristow Group                  38,880      33,170       59,688      56,893

 Preferred stock dividends      —         (3,163)      —         (6,325)

 Net income available to
 common stockholders          $ 38,880    $ 30,007     $ 59,688    $ 50,568



Earnings per common share:

 Basic                        $ 1.07      $ 0.98       $ 1.66      $ 1.70

 Diluted                      $ 1.06      $ 0.92       $ 1.63      $ 1.58








BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)





                                                   September 30,  March 31,
                                                   2010           2010

                                                   (Unaudited)



ASSETS

Current assets:

  Cash and cash equivalents                        $ 108,501      $ 77,793

  Accounts receivable from non-affiliates            231,351        203,312

  Accounts receivable from affiliates                19,812         16,955

  Inventories                                        193,017        186,863

  Prepaid expenses and other current assets          41,759         31,448

   Total current assets                              594,440        516,371

Investment in unconsolidated affiliates              205,779        204,863

Property and equipment – at cost:

  Land and buildings                                 95,998         86,826

  Aircraft and equipment                             2,093,105      2,036,962

                                                     2,189,103      2,123,788

  Less – Accumulated depreciation and
  amortization                                       (436,769)      (404,443)

                                                     1,752,334      1,719,345

Goodwill                                             32,185         31,755

Other assets                                         22,187         22,286

                                                   $ 2,606,925    $ 2,494,620



LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:

  Accounts payable                                 $ 61,545       $ 48,545

  Accrued wages, benefits and related taxes          36,049         35,835

  Income taxes payable                               952            2,009

  Other accrued taxes                                5,575          3,056

  Deferred revenues                                  6,904          19,321

  Accrued maintenance and repairs                    15,663         10,828

  Accrued interest                                   6,429          6,430

  Other accrued liabilities                          20,680         14,508

  Deferred taxes                                     10,714         10,217

  Short-term borrowings and current maturities of
  long-term debt                                     23,798         15,366

   Total current liabilities                         188,309        166,115

Long-term debt, less current maturities              696,779        701,195

Accrued pension liabilities                          112,551        106,573

Other liabilities and deferred credits               28,636         20,842

Deferred taxes                                       148,021        143,324



Stockholders' investment:

  Common stock                                       362            359

  Additional paid-in capital                         684,464        677,397

  Retained earnings                                  879,033        820,145

  Accumulated other comprehensive loss               (137,414)      (148,102)

                                                     1,426,445      1,349,799

  Noncontrolling interests                           6,184          6,772

                                                     1,432,629      1,356,571

                                                   $ 2,606,925    $ 2,494,620








BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)



                                                      Six Months Ended
                                                      September 30,

                                                      2010        2009



Cash flows from operating activities:

 Net income                                           $ 59,756    $ 57,701

Adjustments to reconcile net income to net cash
provided by operating activities:

 Depreciation and amortization                          40,299      36,656

 Deferred income taxes                                  4,385       13,340

 Discount amortization on long-term debt                1,565       1,462

 Gain on disposal of assets                             (3,615)     (10,889)

 Gain on sale of joint ventures                         (572)       —

 Stock-based compensation                               8,019       6,611

 Equity in earnings from unconsolidated affiliates
 less than (in excess of) dividends

 received                                               (890)       (3,846)

 Tax benefit related to stock-based compensation        (179)       (433)

Increase (decrease) in cash resulting from changes
in:

 Accounts receivable                                    (24,940)    13,707

 Inventories                                            (3,000)     (13,243)

 Prepaid expenses and other assets                      (14,363)    (10,391)

 Accounts payable                                       9,774       2,528

 Accrued liabilities                                    (2,917)     (10,303)

 Other liabilities and deferred credits                 (4,138)     10,709

Net cash provided by operating activities               69,184      93,609

Cash flows from investing activities:

 Capital expenditures                                   (63,943)    (136,145)

 Deposits on assets held for sale                       1,000       —

 Proceeds from sale of joint ventures                   1,291       —

 Proceeds from asset dispositions                       17,178      71,238

 Acquisition, net of cash received                      —         (178,961)

Net cash used in investing activities                   (44,474)    (243,868)

Cash flows from financing activities:

 Proceeds from borrowings                               10,012      —

 Repayment of debt                                      (7,630)     (8,858)

 Distribution to noncontrolling interest owners         (637)       —

 Partial prepayment of put/call obligation              (28)        (37)

 Acquisition of noncontrolling interest                 (800)       —

 Preferred stock dividends paid                         —         (6,325)

 Issuance of common stock                               111         1,089

 Tax benefit related to stock-based compensation        179         433

Net cash provided by (used in) financing activities     1,207       (13,698)

Effect of exchange rate changes on cash and cash
equivalents                                             4,791       6,193

Net increase (decrease) in cash and cash equivalents    30,708      (157,764)

Cash and cash equivalents at beginning of period        77,793      300,969

Cash and cash equivalents at end of period            $ 108,501   $ 143,205








BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)



                          Three Months Ended        Six Months Ended
                          September 30,             September 30,

                          2010         2009         2010           2009

Gross revenue:

Europe                    $ 117,595    $ 113,913    $ 219,286      $ 228,978

North America               55,281       48,737       108,092        98,593

West Africa                 58,110       51,452       117,206        106,269

Australia                   37,364       30,333       72,655         58,496

Other International         36,295       37,007       69,114         70,001

Corporate and other         8,421        11,362       19,263         23,178

Intrasegment eliminations   (507)        (1,189)      (819)          (3,448)

Corporate and other       $ 312,559    $ 291,615    $ 604,797      $ 582,067





Operating income (loss):

Europe                    $ 21,612     $ 19,063     $ 39,911       $ 38,841

North America               8,904        4,716        14,212         9,142

West Africa                 17,158       15,064       32,794         28,727

Australia                   6,094        7,011        14,046         12,667

Other International         11,102       12,978       13,367         20,190

Corporate and other         (13,208)     (10,145)     (24,707)       (22,117)

Gain on disposal of other
assets                      1,897        4,880        3,615          10,889

Consolidated total        $ 53,559     $ 53,567     $ 93,238       $ 98,339





Operating margin:

Europe                      18.4     %   16.7     %   18.2      %    17.0     %

North America               16.1     %   9.7      %   13.1      %    9.3      %

West Africa                 29.5     %   29.3     %   28.0      %    27.0     %

Australia                   16.3     %   23.1     %   19.3      %    21.7     %

Other International         30.6     %   35.1     %   19.3      %    28.8     %

Consolidated total          17.1     %   18.4     %   15.4      %    16.9     %





Flight hours (excludes
Bristow Academy and

unconsolidated
affiliates):

Europe                      14,432       14,242       27,399         29,097

North America               23,279       21,215       44,683         43,332

West Africa                 9,572        8,470        19,332         17,420

Australia                   3,318        2,794        6,558          5,674

Other International         12,577       11,810       24,055         22,935

Consolidated total          63,178       58,531       122,027        118,458









BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
AS OF SEPTEMBER 30, 2010



               Aircraft in Consolidated Fleet

               Helicopters

                                               Fixed  Total  Unconsolidated
               Small  Medium  Large  Training  Wing   (1)    Affiliates(2)   Total

Europe         —    14      37     —       —    51     63              114

North America  72     27      6      —       —    105    —             105

West Africa    12     33      5      —       3      53     —             53

Australia      3      14      18     —       —    35     —             35

Other
International  5      42      12     —       —    59     136             195

Corporate and
other          —    —     —    76        —    76     —             76

Total          92     130     78     76        3      379    199             578

Aircraft not
currently in
fleet: (3)

On order       —    5       7      —       —    12

Under option   —    25      10     —       —    35



(1) Includes 12 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.








BRISTOW GROUP INC. AND SUBSIDIARIES
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, the most comparable GAAP
financial measure to EBITDA, is as follows (in thousands):





                              Three Months Ended    Six Months Ended
                              September 30,         September 30,

                              2010       2009       2010        2009



                              (Unaudited)

Net income                    $ 38,848   $ 33,710   $ 59,756    $ 57,701

Provision for income taxes      3,316      11,236     11,856      20,746

Interest expense                11,452     10,640     22,490      20,652

Depreciation and amortization   20,968     18,470     40,299      36,656

EBITDA                        $ 74,584   $ 74,056   $ 134,401   $ 135,755







SOURCE Bristow Group Inc.