Bristow Group Reports Strong Fiscal 2008 Second Quarter Results
HOUSTON, Nov. 5 /PRNewswire-FirstCall/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for its fiscal 2008 second quarter ended September 30, 2007.
Highlights include:
For the quarter ended September 30, 2007:
-- Revenue of $273.3 million increased by 21.9 percent over the second
quarter of fiscal year 2007. Revenue gains occurred in most of our
business units, driven by increases in rates for helicopter services
and the addition of new aircraft;
-- Operating income of $50.6 million and operating margin of 18.5 percent
increased over operating income of $30.9 million and operating margin
of 13.8 percent for the second quarter of fiscal year 2007, primarily
as a result of the improvement in revenue as well as the items
discussed below;
-- Net income of $34.0 million increased by $14.9 million versus net
income for the second quarter of fiscal year 2007. Increases in
operating income, foreign currency gains and earnings from
unconsolidated affiliates contributed to the improvement in the latest
quarter's net income;
-- Diluted earnings per share increased to $1.12 from $0.79 for the second
quarter of fiscal year 2007. Diluted earnings per share for the second
quarter of fiscal years 2008 and 2007 reflected the assumed conversion
of the Company's Mandatory Convertible Preferred Stock, which added
approximately 6.5 million and 0.7 million shares, respectively, to the
weighted average diluted shares calculation.
-- Operating results for the second quarter of fiscal year 2008 included
the following items:
-- Reversal of $1.0 million of previously accrued settlement costs
associated with the U.S. Securities and Exchange Commission ("SEC")
investigation settled in September 2007.
-- Reversal of a $5.4 million accrual for sales tax contingency in
Nigeria.
-- $2.1 million of retroactive rate increases with a major customer in
Nigeria.
Excluding these items, operating income, operating margin, net income and diluted EPS would have been $42.1 million, 15.5%, $28.4 million and $0.93 per common share, respectively.
For the six months ended September 30, 2007:
-- Revenue of $518.3 million increased by 16.4 percent over the same
period of fiscal year 2007. Revenue gains occurred in most of our
business units, driven by increases in rates for helicopter services
and the addition of new aircraft;
-- Operating income of $80.5 million and operating margin of 15.5 percent
increased over operating income of $61.9 million and operating margin
of 13.9 percent for the same period in fiscal year 2007, primarily as a
result of the improvement in rates;
-- Net income of $56.6 million increased by $20.3 million versus net
income for the six months ended September 30, 2006. Increases in
operating income, foreign currency gains and earnings from
unconsolidated affiliates contributed to the improvement in
year-to-date net income.
-- Diluted earnings per share increased to $1.87 from $1.52 for the same
period in fiscal year 2007. Diluted earnings per share for the six
months ended September 30, 2007 and 2006 reflected the assumed
conversion of the Company's Mandatory Convertible Preferred Stock,
which added approximately 6.5 million and 0.3 million shares,
respectively, to the weighted average diluted shares calculation.
-- Operating results for the six months ended September 30, 2007 included
the following items:
-- Reversal of $1.0 million of previously accrued SEC settlement costs.
-- Reversal of a $5.4 million accrual for sales tax contingency in
Nigeria.
Excluding these items, operating income, operating margin, net income and diluted EPS would have been $74.1 million, 14.3%, $52.5 million and $1.73 per common share, respectively.
Capital and Liquidity:
-- The September 30, 2007 consolidated balance sheet reflected
$942.3 million in stockholders' investment and $557.3 million of
indebtedness;
-- We had $276.4 million in cash and an undrawn $100 million revolving
credit facility;
-- We generated $43.5 million of cash from operating activities for the
six months ended September 30, 2007. We also used $221.1 million for
capital expenditures, primarily for aircraft, and $12.9 million for the
acquisition (net of cash acquired) of Bristow Academy during the six
months ended September 30, 2007;
-- Aircraft purchase commitments totaled $276.5 million, with options
totaling $608.0 million as of September 30, 2007.
William E. Chiles, President and Chief Executive Officer of Bristow Group Inc., said, "We are very pleased with our strong financial performance and excellent execution against our strategic plan during the latest quarter. We continue to proceed with our plan to expand our fleet and we recently announced our decision to exercise options to acquire an additional four Sikorsky S-92(R) large helicopters and three Sikorsky S-76C++(TM) medium helicopters with a combined value of more than $100 million. All seven helicopters are expected to be delivered in late 2008.
"We also remain on target with our plan to improve overall margins and operating efficiencies. We are systematically reviewing the profitability of our contracts and making a concerted effort to improve our return on capital, especially in Nigeria.
"The industry fundamentals continue to be very strong, and our customers remain committed to field development plans, which are the primary drivers of our growth. We continue to believe demand for aircraft will exceed supply over the next several years, which should create good opportunities to enhance revenue and margin growth going forward."
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. EST
(9:00 a.m. CST) on Tuesday, November 6, 2007, to review financial results for the fiscal quarter ended September 30, 2007. 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 "Q2 2008 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) 257-1836
-- Replay: A telephone replay will be available through November 20, 2007,
by dialing toll free (800) 405-2236, passcode: 11099470#
Via Telephone outside the U.S.:
-- Live: Dial (303) 262-2139
-- Replay: A telephone replay will be available through November 20, 2007
by dialing (303) 590-3000, passcode: 11099470#
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. Through its subsidiaries, affiliates and joint ventures, the Company has major transportation operations in the U.S. Gulf of Mexico and the North Sea, and in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, Russia and Trinidad. For more information, visit the Company's website at http://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 customer demand, industry conditions, future results, revenue growth, margins, operating efficiency, rate of return, the addition of new aircraft to our fleet and aircraft delivery. 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 September 30, 2007 and the annual report on Form 10-K for the year ended March 31, 2007. 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.
Contact:
Joe Baj, VP & Treasurer
(713) 267-7605
Linda McNeill, Treasury Manager
(713) 267-7622
(financial tables follow)
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
September 30, September 30,
--------------------- ---------------------
2006 2007 2006 2007
--------- --------- --------- ---------
(Unaudited)
Gross revenue:
Operating revenue from
non-affiliates $191,341 $231,475 $373,127 $443,929
Operating revenue
from affiliates 11,631 13,858 23,710 24,955
Reimbursable revenue
from non-affiliates 20,091 25,505 46,216 45,853
Reimbursable revenue
from affiliates 1,146 2,498 2,218 3,601
--------- --------- --------- ---------
224,209 273,336 445,271 518,338
--------- --------- --------- ---------
Operating expense:
Direct cost 148,872 162,764 287,341 326,600
Reimbursable expense 20,879 25,793 47,778 47,034
Depreciation and
amortization 10,737 12,395 21,020 23,768
General and
administrative 16,527 21,039 31,876 40,301
Loss (gain) on
disposal of assets (3,667) 754 (4,665) 170
--------- --------- --------- ---------
193,348 222,745 383,350 437,873
--------- --------- --------- ---------
Operating income 30,861 50,591 61,921 80,465
Earnings from
unconsolidated
affiliates, net
of losses 1,728 4,118 3,287 7,508
Interest income 1,069 4,049 2,359 6,247
Interest expense (2,871) (6,523) (6,107) (9,456)
Other income (expense),
net (1,308) 360 (6,093) 786
--------- --------- --------- ---------
Income before
provision for
income taxes and
minority interest 29,479 52,595 55,367 85,550
Provision for income
taxes (9,728) (18,641) (18,271) (28,475)
Minority interest (676) (4) (792) (453)
--------- --------- --------- ---------
Net income 19,075 33,950 36,304 56,622
Preferred stock
dividends (321) (3,163) (321) (6,325)
--------- --------- --------- ---------
Net income available
to common
stockholders $18,754 $30,787 $35,983 $50,297
========= ========= ========= =========
Earnings per common share:
Basic $0.80 $1.30 $1.54 $2.13
========= ========= ========= =========
Diluted $0.79 $1.12 $1.52 $1.87
========= ========= ========= =========
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, September 30,
2007 2007
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $184,188 $276,439
Accounts receivable from non-affiliates 158,770 191,962
Accounts receivable from affiliates 17,199 14,862
Inventories 157,870 176,459
Prepaid expenses and other 17,947 26,244
------------- -------------
Total current assets 535,974 685,966
Investment in unconsolidated affiliates 46,828 54,314
Property and equipment - at cost:
Land and buildings 51,850 55,619
Aircraft and equipment 1,141,578 1,353,975
------------- -------------
1,193,428 1,409,594
Less - Accumulated depreciation
and amortization (301,520) (309,726)
------------- -------------
891,908 1,099,868
Goodwill 20,368 29,302
Other assets 10,725 29,793
------------- -------------
$1,505,803 $1,899,243
============= =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $42,343 $49,055
Accrued wages, benefits and related taxes 38,281 39,414
Income taxes payable 4,377 9,489
Other accrued taxes 9,084 5,118
Deferred revenues 16,283 14,703
Accrued maintenance and repairs 12,309 13,556
Other accrued liabilities 22,828 27,167
Deferred taxes 17,611 18,479
Short-term borrowings and current
maturities of long-term debt 4,852 6,764
------------- -------------
Total current liabilities 167,968 183,745
Long-term debt, less current maturities 254,230 550,571
Accrued pension liabilities 113,069 112,121
Other liabilities and deferred credits 17,345 15,312
Deferred taxes 76,089 89,914
Minority interest 5,445 5,258
Commitments and contingencies
Stockholders' investment:
5.50% mandatory convertible preferred stock 222,554 222,554
Common stock 236 237
Additional paid-in capital 169,353 174,383
Retained earnings 515,589 565,886
Accumulated other comprehensive loss (36,075) (20,738)
------------- -------------
871,657 942,322
------------- -------------
$1,505,803 $1,899,243
============= =============
BRISTOW GROUP INC. AND SUBSIDIARIES
CORPORATE ITEMS AFFECTING THE COMPARABILITY OF RESULTS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30,
--------------------------------------------------------
2006 2007
--------------------------- ---------------------------
Diluted Diluted
Earnings Earnings
Pre-tax Net Per Pre-tax Net Per
Earnings Income Share Earnings Income Share
--------- ------- ------- -------- ------- --------
Investigations:
SEC (1) $- $- $- $1,000 $650 $0.02
DOJ (2) (282) (183) (0.01) (488) (317) (0.01)
Tax contingency
related items (3) - 700 0.03 5,396 3,407 0.11
7 1/2% Senior
Notes due 2017 (4) - - - (2,248) (1,461) (0.05)
Foreign currency
transaction gains
(losses) (5) (1,333) (867) (0.04) 334 217 0.01
Preferred
Stock (6) 291 189 (0.01) - - (0.30)
--------- ------- ------- -------- ------- --------
Total $(1,324) $(161) $(0.03) $3,994 $2,496 $(0.22)
========= ======= ======= ======== ======= ========
Six Months Ended September 30,
--------------------------------------------------------
2006 2007
--------------------------- ---------------------------
Diluted Diluted
Earnings Earnings
Pre-tax Net Per Pre-tax Net Per
Earnings Income Share Earnings Income Share
--------- ------- ------- -------- ------- --------
Investigations:
SEC (1) $- $- $- $1,000 $650 $0.02
DOJ (2) (873) (567) (0.02) (488) (317) (0.01)
Tax contingency
related items (3) - 1,500 0.06 5,396 4,407 0.15
7 1/2% Senior
Notes due 2017 (4) - - - (2,605) (1,693) (0.06)
Foreign currency
transaction gains
(losses) (5) (6,142) (3,993) (0.17) 735 478 0.02
Preferred
Stock (6) 291 189 (0.01) 826 537 (0.50)
--------- ------- ------- -------- ------- --------
Total $(6,724) $(2,871) $(0.14) $4,864 $4,062 $(0.38)
========= ======= ======= ======== ======= ========
(1) Represents a reversal of previously accrued costs incurred in
conjunction with the SEC investigation regarding findings from the
internal review initiated by the Audit Committee of our board of
directors in fiscal year 2005 of certain payments made by two of our
affiliated entities in a foreign country. These costs were included
in general & administrative costs in our consolidated statements of
income.
(2) Represents legal and other professional fees incurred in connection
with a document subpoena received from the Antitrust Division of the
Department of Justice ("DOJ") in June 2005, which related to a grand
jury investigation of potential antitrust violations among providers
of helicopter transportation services in the U.S. Gulf of Mexico
focusing on activities during the period from January 1, 2000 to
June 13, 2005. These costs are included in general & administrative
costs in our consolidated statements of income.
(3) Represents $5.4 million in reversal of accrual for sales tax
contingency during the three and six months ended September 30, 2007
in Nigeria included in direct costs in our consolidated statements of
income and a direct reduction in our provision for income taxes in our
consolidated statements of income for income tax contingency items,
which represents the remainder of the impact on net income and diluted
earnings per share.
(4) Represents the effect on interest expense, net of interest income from
invested proceeds, resulting from the issuance of 7 1/2% Senior Notes
due 2017 in June 2007.
(5) Represents foreign currency transaction gains and losses resulting
from changes in exchange rates during the applicable periods. The
effects of these foreign currency transaction gains and losses were
offset to a large extent by corresponding charges or benefits in the
cumulative translation adjustment in stockholders' investment with no
overall economic effect. These amounts are included in other income
(expense), net in our consolidated statements of income.
(6) Represents the effect of the preferred stock offering completed in
September and October 2006. The net income effect results from
interest income earned on remaining cash proceeds generated from the
offering. Diluted earnings per share for the three and six months
ended September 30, 2007 and 2006 was reduced by the effect of the
inclusion of weighted average shares resulting from the assumed
conversion of the preferred stock at the conversion rate that results
in the most dilution, partially offset by the impact of higher
interest income.
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
Three Months Ended Six Months Ended
September 30, September 30,
--------------------- ---------------------
2006 2007 2006 2007
---------- -------- ----------- --------
(Unaudited)
Flight hours (excludes
Bristow Academy and
unconsolidated affiliates):
Helicopter Services:
North America 41,148 39,623 83,757 79,894
South and Central
America 9,631 10,810 18,916 22,177
Europe 10,685 11,494 20,855 22,315
West Africa 9,179 9,887 18,062 18,785
Southeast Asia 3,063 3,644 6,269 6,988
Other International 2,426 2,177 4,478 4,724
---------- -------- ----------- --------
Consolidated
total 76,132 77,635 152,337 154,883
========== ======== =========== ========
Gross revenue:
Helicopter Services:
North America $62,504 $62,059 $125,872 $122,998
South and Central
America 13,137 16,951 26,149 32,987
Europe 72,706 93,459 144,687 176,816
West Africa 31,210 45,799 62,946 79,082
Southeast Asia 17,626 23,858 34,666 46,350
Other International 12,184 12,046 21,139 23,501
EH Centralized
Operations 3,538 5,331 6,612 12,136
Bristow Academy - 3,228 - 6,247
Intrasegment
eliminations (3,276) (3,005) (6,136) (9,240)
---------- -------- ----------- --------
Total Helicopter
Services 209,629 259,726 415,935 490,877
Production Management
Services 17,784 16,030 35,468 32,573
Corporate - - (25) -
Intersegment
eliminations (3,204) (2,420) (6,107) (5,112)
---------- -------- ----------- --------
Consolidated
total $224,209 $273,336 $445,271 $518,338
========== ======== =========== ========
Operating income:
Helicopter Services:
North America $7,107 $10,869 $16,340 $21,583
South and Central
America 3,624 4,573 7,594 8,258
Europe 13,527 21,895 27,623 36,470
West Africa 2,848 15,492 7,181 18,289
Southeast Asia 3,210 5,107 5,645 9,234
Other International 3,771 1,781 5,287 4,046
EH Centralized
Operations (2,584) (3,247) (4,351) (7,526)
Bristow Academy - (391) - (482)
---------- -------- ----------- --------
Total Helicopter
Services 31,503 56,079 65,319 89,872
Production Management
Services 1,394 870 2,807 1,959
Gain (loss) on
disposal of assets 3,667 (754) 4,665 (170)
Corporate (5,703) (5,604) (10,870) (11,196)
---------- -------- ----------- --------
Consolidated
total $30,861 $50,591 $61,921 $80,465
========== ======== =========== ========
Operating margin:
Helicopter Services:
North America 11.4% 17.5% 13.0% 17.5%
South and Central
America 27.6% 27.0% 29.0% 25.0%
Europe 18.6% 23.4% 19.1% 20.6%
West Africa 9.1% 33.8% 11.4% 23.1%
Southeast Asia 18.2% 21.4% 16.3% 19.9%
Other International 31.0% 14.8% 25.0% 17.2%
EH Centralized
Operations (73.0)% (60.9)% (65.8)% (62.0)%
Bristow Academy N/A (12.1)% N/A (7.7)%
Total Helicopter
Services 15.0% 21.6% 15.7% 18.3%
Production Management
Services 7.8% 5.4% 7.9% 6.0%
Consolidated total 13.8% 18.5% 13.9% 15.5%
SOURCE Bristow Group Inc.
Released November 5, 2007