Bristow Group Reports Fiscal 2009 Third Quarter Financial Results
HOUSTON, Feb. 4 /PRNewswire-FirstCall/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for the three months ended December 31, 2008, which is the Company's fiscal 2009 third quarter.
Highlights include:
For the December 2008 quarter:
-- Revenue increased 8% versus the December 2007 quarter to $283.0 million.
Revenue gains occurred across most of our business units, but most
significantly in our Europe, Latin America and West Africa business
units. Revenue gains were driven in large part by increases in rates,
the addition of new aircraft and the consolidation of Norsk Helikopters
AS ("Norsk"), our Norwegian affiliate, effective October 31,
2008.
-- Operating income increased 101% to $73.7 million from $36.7 million in
the December 2007 quarter.
-- Income from continuing operations increased 82% to $47.6 million from
$26.2 million in the December 2007 quarter.
-- Diluted earnings per share from continuing operations increased to $1.34
from $0.86 in the December 2007 quarter.
-- The largest factors affecting operating results for the December 2008
quarter include the following items:
-- The gain on the sale of 53 small aircraft, related inventory, spare
parts and offshore fuel equipment in the U.S. Gulf of Mexico (the
"GOM Asset Sale") on October 30, 2008, which increased
operating income by $37.8 million, income from continuing operations by
$24.4 million and diluted earnings per share by $0.69.
-- The strengthening U.S. Dollar and resulting changes in foreign currency
exchange rates during the December 2008 quarter, which decreased
operating income by $2.3 million, income from continuing operations by
$2.5 million and diluted earnings per share by $0.07.
-- A decrease in our overall effective tax rate to 25.1% for the December
2008 quarter resulting from a $2.6 million benefit related to tax
elections filed in the December 2008 quarter as part of an internal
reorganization and the resolution of $1.4 million in uncertain tax
positions, which increased income from continuing operations by $4.0
million and diluted earnings per share by $0.11. Excluding these
benefits, as well as the impact of the taxes associated with the GOM
Asset Sale, our overall effective tax rate for the December 2008 quarter
was 25.5%.
-- Excluding the items discussed above, diluted earnings per share would
have been $0.61 in the December 2008 quarter. Additionally, as a result
of shares issued in our June 2008 equity offering and private placement,
diluted earnings per share in the December 2008 quarter was further
reduced by $0.21.
For the nine months ended December 31, 2008:
-- Revenue increased 14% versus the nine months ended December 31, 2007 to
$858.8 million. Revenue gains occurred across all of our business
units, but most significantly in our Europe, Southeast Asia, West Africa
and U.S. Gulf of Mexico business units. Revenue gains were driven in
large part by increases in rates, the addition of new aircraft and the
consolidation of Norsk.
-- Operating income increased 26% to $145.7 million from $115.3 million for
the nine months ended December 31, 2007.
-- Income from continuing operations increased 21% to $98.3 million from
$81.5 million for the nine months ended December 31, 2007.
-- Diluted earnings per share from continuing operations increased to $2.87
from $2.68 for the nine months ended December 31, 2007.
-- The largest factors affecting operating results for the nine months
ended December 31, 2008 were:
-- The gain on the GOM Asset Sale, which increased operating income by
$37.8 million, income from continuing operations by $24.4 million and
diluted earnings per share by $0.71.
-- The strengthening U.S. dollar and resulting changes in foreign currency
exchange rates during the nine months ended December 31, 2008, which
decreased operating income by $6.0 million, income from continuing
operations by $2.5 million and diluted earnings per share by $0.07.
-- Hurricanes in the U.S. Gulf of Mexico during the nine months ended
December 31, 2008, which resulted in a decrease in flight activity and
an increase in costs, reducing operating income by $2.1 million, income
from continuing operations by $1.8 million and diluted earnings per
share by $0.05.
-- Expense recognized in the nine months ended December 31, 2008 for a bad
debt provision of $1.3 million in Europe and revenue recognized in the
nine months ended December 31, 2008 related to contractual rate
escalations and retroactive rate adjustments applicable to services
performed in prior periods in Europe of $3.4 million and Russia, a part
of our Other International business unit, of $1.2 million. Combined,
these items increased operating income by $3.3 million, income from
continuing operations by $2.3 million and diluted earnings per share by
$0.07.
-- Decreases in operating results in Australia, part of our Southeast Asia
business unit, which resulted in a reduction in operating income by
$10.4 million, income from continuing operations by $7.4 million and
diluted earnings per share by $0.22.
-- The restructuring of our ownership interests in affiliates in Mexico,
part of our Latin America business unit, which resulted in several
changes effective April 1, 2008, which increased operating income by
$0.8 million, income from continuing operations by $3.7 million and
diluted earnings per share by $0.11.
-- A decrease in our overall effective tax rate to 26.9% for the nine
months ended December 31, 2008 resulting from a $2.6 million benefit
related to tax elections filed in the December 2008 quarter as part of
an internal reorganization and the resolution of $2.1 million in
uncertain tax positions, which increased income from continuing
operations by $4.7 million and diluted earnings per share by $0.14.
Excluding these benefits, as well as the impact of the taxes associated
with the GOM Asset Sale, our overall effective tax rate for the nine
months ended December 31, 2008 was 28.5%.
-- Excluding the items discussed above, diluted earnings per share would
have been $2.17 in the nine months ended December 31, 2008.
Additionally, as a result of shares issued in our June 2008 equity
offering and private placement, diluted earnings per share in the nine
months ended December 31, 2008 was further reduced by $0.35.
-- Financial results for the nine months ended December 31, 2007 included:
-- A reversal of accrued costs of $1.0 million associated with the
settlement of the U.S. Securities and Exchange Commission investigation.
-- The reversal of $5.4 million in sales tax contingency in Nigeria.
-- $2.0 million of contractual rate escalations on services performed in
prior periods under contracts with our customers in Europe.
-- A $1.8 million impairment charge related to inventory in EH Centralized
Operations.
-- These items collectively increased operating income by $6.6 million,
income from continuing operations by $4.4 million and diluted earnings
per share by $0.14 during the nine months ended December 31, 2007.
Capital and Liquidity
-- At December 31, 2008 we continued to have a strong balance sheet, which
allows us the financial flexibility to take advantage of growth
opportunities:
-- $1.2 billion in stockholders' investment and $747.3 million of
indebtedness
-- $364.7 million in cash and $100 million undrawn revolving credit
facility
-- Aircraft purchase commitments totaled $298.4 million for 31 aircraft,
with options totaling $803.1 million for 47 aircraft
-- During the nine months ended December 31, 2008, we generated strong cash
flows, including:
-- $104 million of cash from operating activities
-- $87 million of proceeds from sales of assets, including the GOM Asset
Sale
-- $336 million in net proceeds from the sale of convertible senior notes
and common stock
-- We used $388 million for capital expenditures - primarily for aircraft -
and $16 million for acquisitions
CEO Remarks
"During our third fiscal quarter we continued to experience good growth in activity and revenue, particularly in Mexico, Brazil, Nigeria and the North Sea. This was driven by improved pricing and the continued upgrade of our fleet to larger, more efficient and more profitable aircraft," said William E. Chiles, President and Chief Executive Officer of Bristow Group Inc.
"Looking ahead, we know that Bristow will not be completely immune to the impact of declining commodity prices on E&P spending, but we do not expect to be as affected as other oil service companies. Although some of the demand for our services has softened and may continue to do so, our production focus, global critical mass of the largest fleet of helicopters and geographic and customer diversity should help us weather the cycle. We also continue to apply pricing and investment discipline.
"Our $465 million of cash and unused credit lines provides financial strength as we weather this uncertain operating environment and the flexibility to take advantage of good opportunities for long-term growth. We expect to continue to upgrade our fleet at a pace that should enable us to continue growing revenues and margins but at the same time recognizes the more challenging market environment we currently face," Chiles said.
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. EST (9:00 a.m. CST) on Wednesday, February 4, 2009, to review financial results for the fiscal 2009 third quarter ended December 31, 2008. The conference call can be accessed as follows:
Via Webcast:
-- Visit Bristow Group's investor relations Web page at
http://www.bristowgroup.com
-- Live: Click on the link for "Q3 2009 Bristow Group Inc. Earnings
Conference Call"
-- Replay: A replay via webcast will be available approximately one hour
after the call's completion
Via Telephone within the U.S.:
-- Live: Dial toll free (800) 240-2430
-- Replay: A telephone replay will be available through Wednesday, February
18, by dialing toll free (800) 405-2236, passcode: 11124864#
Via Telephone outside the U.S.:
-- Live: Dial (303) 262-2137
-- Replay: A telephone replay will be available through Wednesday, February
18, by dialing (303) 590-3000, passcode: 11124864#
ABOUT BRISTOW GROUP INC.
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 most of the major offshore oil and gas producing regions of the world, including in the North Sea, the U.S. Gulf of Mexico, Nigeria and Australia. 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 declining commodity prices, fleet upgrades, revenue and margin growth, customer demand, future operations, future liquidity and growth plans and opportunities. 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, 2008 and the annual report on Form 10-K for the fiscal year ended March 31, 2008. 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 Nine Months
Ended Ended
December 31, December 31,
------------ ------------
2007 2008 2007 2008
---- ---- ---- ----
Gross revenue:
Operating revenue from
non-affiliates $222,831 $236,491 $642,598 $726,151
Operating revenue from
affiliates 13,633 16,792 38,588 52,492
Reimbursable revenue
from non-affiliates 23,439 28,617 66,075 76,196
Reimbursable revenue
from affiliates 1,617 1,087 5,218 3,959
----- ----- ----- -----
261,520 282,987 752,479 858,798
------- ------- ------- -------
Operating expense:
Direct cost 169,704 176,038 475,416 551,404
Reimbursable expense 24,344 28,689 68,587 79,437
Depreciation and
amortization 12,445 16,663 36,127 47,103
General and
administrative 22,373 25,586 61,018 78,776
Gain on GOM Asset Sale - (37,780) - (37,780)
(Gain) loss on disposal
of other assets (4,094) 102 (3,921) (5,865)
------ --- ------ ------
224,772 209,298 637,227 713,075
------- ------- ------- -------
Operating income 36,748 73,689 115,252 145,723
Earnings from
unconsolidated
affiliates, net of losses 3,725 (1,417) 11,233 8,277
Interest income 3,697 1,087 9,781 5,739
Interest expense (6,684) (7,603) (16,135) (24,500)
Other income (expense), net 989 (1,522) 1,775 2,240
--- ------ ----- -----
Income from continuing
operations before
provision for income
taxes and minority
interest 38,475 64,234 121,906 137,479
Provision for income taxes (12,302) (16,106) (40,035) (37,020)
Minority interest 61 (535) (392) (2,190)
-- ---- ---- ------
Income from continuing
operations 26,234 47,593 81,479 98,269
Discontinued operations:
Income (loss) from
discontinued operations
before provision for
income taxes (1,429) - 690 (379)
(Provision) benefit for
income taxes on
discontinued Operations (4,657) - (5,399) 133
------ --- ------ ---
Loss from discontinued
operations (6,086) - (4,709) (246)
------ --- ------ ----
Net income 20,148 47,593 76,770 98,023
Preferred stock
dividends (3,162) (3,162) (9,487) (9,487)
------ ------ ------ ------
Net income available to
common stockholders $16,986 $44,431 $67,283 $88,536
======= ======= ======= =======
Basic earnings per common
share:
Earnings from continuing
operations $0.97 $1.53 $3.03 $3.21
Loss from discontinued
operations (0.26) - (0.19) (0.01)
----- --- ----- -----
Net earnings $0.71 $1.53 $2.84 $3.20
===== ===== ===== =====
Diluted earnings per
common share:
Earnings from continuing
operations $0.86 $1.34 $2.68 $2.87
Loss from discontinued
operations (0.20) - (0.16) (0.01)
----- --- ----- -----
Net earnings $0.66 $1.34 $2.52 $2.86
===== ===== ===== =====
Weighted average number of
common shares outstanding:
Basic 23,812 29,101 23,728 27,635
Diluted 30,527 35,628 30,450 34,185
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2008 2008
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $290,050 $364,653
Accounts receivable from
non-affiliates 204,599 182,061
Accounts receivable from
affiliates 11,316 29,151
Inventories 176,239 158,340
Prepaid expenses and other 24,177 18,813
------ ------
Total current assets 706,381 753,018
Investment in unconsolidated
affiliates 52,467 18,927
Property and equipment - at cost:
Land and buildings 60,056 60,539
Aircraft and equipment 1,428,996 1,744,990
--------- ---------
1,489,052 1,805,529
Less - Accumulated depreciation and
amortization (316,514) (300,413)
-------- --------
1,172,538 1,505,116
Goodwill 15,676 37,138
Other assets 30,293 29,452
------ ------
$1,977,355 $2,343,651
========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $49,650 $52,352
Accrued wages, benefits and
related taxes 35,523 39,357
Income taxes payable 5,862 13,740
Other accrued taxes 1,589 2,194
Deferred revenues 15,415 17,736
Accrued maintenance and repairs 13,250 14,613
Accrued interest 5,656 8,614
Other accrued liabilities 22,235 19,945
Deferred taxes 9,238 7,236
Short-term borrowings and
current maturities of
long-term debt 6,541 6,014
----- -----
Total current liabilities 164,959 181,801
Long-term debt, less current maturities 599,677 741,301
Accrued pension liabilities 134,156 94,421
Other liabilities and deferred
credits 14,805 14,830
Deferred taxes 91,747 106,208
Minority interest 4,570 11,098
Commitments and contingencies
Stockholders' investment:
5.50% mandatory convertible
preferred stock 222,554 222,554
Common stock 239 291
Additional paid-in capital 186,390 418,852
Retained earnings 606,931 696,722
Accumulated other
comprehensive loss (48,673) (144,427)
------- --------
967,441 1,193,992
$1,977,355 $2,343,651
========== ==========
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Nine Months
Ended Ended
December 31, December 31,
------------ ------------
2007 2008 2007 2008
---- ---- ---- ----
Flight hours (excludes Bristow
Academy and unconsolidated
affiliates):
U.S. Gulf of Mexico 33,431 25,553 107,920 98,083
Arctic 1,227 1,279 6,632 7,411
Latin America 10,417 15,228 32,594 36,758
Europe 11,625 13,241 33,940 33,812
West Africa 9,824 9,884 28,609 29,129
Southeast Asia 4,590 4,500 11,578 14,223
Other International 2,120 1,942 6,844 5,818
----- ----- ----- -----
Consolidated total 73,234 71,627 228,117 225,234
====== ====== ======= =======
Gross revenue:
U.S. Gulf of Mexico $53,259 $53,695 $164,635 $177,695
Arctic 2,570 3,005 12,217 14,088
Latin America 16,476 20,707 49,463 59,964
WH Centralized Operations 1,438 3,134 3,413 8,303
Europe 95,100 102,477 271,916 296,210
West Africa 46,287 50,478 125,369 140,788
Southeast Asia 29,918 28,882 76,268 99,143
Other International 11,874 13,223 35,375 40,459
EH Centralized Operations 5,239 7,625 17,375 24,590
Bristow Academy 3,969 5,563 10,216 17,286
Intrasegment eliminations (4,647) (5,802) (13,805) (19,756)
Corporate 37 - 37 28
-- --- -- --
Consolidated total $261,520 $282,987 $752,479 $858,798
======== ======== ======== ========
Operating income:
U.S. Gulf of Mexico $8,122 $8,721 $26,901 $24,973
Arctic (72) 184 2,043 2,603
Latin America 3,828 6,141 11,413 17,169
WH Centralized Operations (871) (2,509) 491 (2,281)
Europe 20,695 16,340 57,165 55,785
West Africa 7,019 13,167 25,308 27,707
Southeast Asia 6,476 5,094 15,710 10,344
Other International 712 3,135 4,758 5,910
EH Centralized Operations (6,404) (6,461) (13,930) (18,849)
Bristow Academy (130) (168) (612) 219
Gain on GOM Asset Sale - 37,780 - 37,780
Gain (loss) on disposal of
other assets 4,094 (102) 3,921 5,865
Corporate (6,721) (7,633) (17,916) (21,502)
------ ------ ------- -------
Consolidated total $36,748 $73,689 $115,252 $145,723
======= ======= ======== ========
Operating margin:
U.S. Gulf of Mexico 15.3 % 16.2 % 16.3 % 14.1 %
Arctic (2.8)% 6.1 % 16.7 % 18.5 %
Latin America 23.2 % 29.7 % 23.1 % 28.6 %
Europe 21.8 % 15.9 % 21.0 % 18.8 %
West Africa 15.2 % 26.1 % 20.2 % 19.7 %
Southeast Asia 21.6 % 17.6 % 20.6 % 10.4 %
Other International 6.0 % 23.7 % 13.5 % 14.6 %
Bristow Academy (3.3)% (3.0)% (6.0)% 1.3 %
Consolidated total 14.1 % 26.0 % 15.3 % 17.0 %
SOURCE Bristow Group Inc.
Released February 4, 2009