Bristow 8K . Reports Fiscal 2007 Third Quarter | BRSWQ 9 Feb 07

News Release

2000 W. Sam Houston Parkway South

Suite 1700

Houston, TX 77042

713-267-7600 Tel

BRISTOW GROUP INC. REPORTS FISCAL 2007 THIRD QUARTER

FINANCIAL RESULTS

HOUSTON (February 5, 2007) - Bristow Group Inc. (NYSE: BRS) today reported financial results for its fiscal 2007 third quarter and nine months ended December 31, 2006.

Highlights included the following:

For the quarter ended December 31, 2006:

Total revenue of $223.8 million increased by 16.4 percent over the third quarter a year ago due to increased revenues in most of our business units driven by a favorable change in mix of aircraft operating, improved pricing and the addition of new aircraft;

Operating income of $21.0 million increased by 18.3 percent primarily due to increases in revenues and gains on sales of aircraft partially offset by higher maintenance and salary expenses;

Net income of $10.5 million decreased 21.6 percent versus net income for the third quarter a year ago and earnings per diluted share of $0.31 decreased 45.6 percent compared to the same three-month period, primarily due to the items related to corporate activities discussed below under “Corporate Items Affecting the Comparability of Results”;

In contrast to the nine-month period, diluted earnings per share for the quarter ended December 31, 2006 was reduced by the effect of inclusion of preferred stock dividends, and the weighted-average shares outstanding used to compute diluted earnings per share did not include the assumed conversion of preferred stock outstanding into common shares. The computation was different in the third quarter because inclusion of these shares and the adjustment for preferred stock dividends would have had an anti-dilutive effect for the period.

For the nine months ended December 31, 2006:

Total revenue of $669.1 million increased by 17.9 percent over the same period a year ago due to increased flight hours, improved pricing and the addition of new aircraft;

Operating income of $82.9 million increased by 51.1 percent primarily due to increases in revenues and gains on sales of aircraft partially offset by higher maintenance and salary expenses;

Net income of $46.8 million rose 16.9 percent versus net income for the nine months ended December 31, 2005 and earnings per diluted share of $1.80 rose 5.9 percent compared to the same period a year ago, primarily due to the items related to corporate activities discussed below under “Corporate Items Affecting the Comparability of Results”;

Diluted earnings per share for the nine months ended December 31, 2006 was reduced by the effect of weighted-average shares resulting from the assumed conversion of the preferred stock at the conversion rate that results in the most dilution. These shares were included in the calculation for the nine-month period, as inclusion of those shares was dilutive for the period.

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

Corporate Items Affecting Comparability of Results:

Net income and diluted earnings per share for the quarter and nine-month period ended December 31, 2006 reflected the following items related to corporate activities (see attached table and accompanying notes for details and amounts by period) that affect the comparability of our results:

Costs expected to be incurred in connection with the resolution of the investigation by the U.S. Securities and Exchange Commission (“SEC”);

Legal fees incurred for the continuing Department of Justice (“DOJ”) investigation;

Acquisition costs previously deferred but expensed in the quarter ended December 31, 2006 because the acquisition is no longer probable;

Tax expense from the sale of the assets of Turbo Engines, Inc. (“Turbo”) on November 30, 2006, which increased the effective tax rates;

Foreign currency transaction gains and losses. However, 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;

The dilutive effect of preferred stock dividends or shares partially offset by interest income on unused offering proceeds.

Capital and Liquidity:

The December 31, 2006 consolidated balance sheets reflect $849.1 million in stockholders’ investment and $259.9 million of indebtedness or 23.4 percent leverage;

We had $219.7 million in cash and an undrawn $100 million revolving credit facility;

We generated $67.9 million in cash from operations and spent $209 million on aircraft during the nine months ended December 31, 2006;

Aircraft purchase commitments totaled $331.0 million with options totaling $386.2 million as of December 31, 2006. In early calendar year 2007, we added further commitments (for which no previous option existed) of $63.6 million.

William E. Chiles, president and chief executive officer of Bristow Group Inc., said, “We are pleased with our operating results for the December quarter, although net income and earnings per share were negatively affected by various items which related primarily to corporate events and activities and non-operating expenses. Strong customer demand for our services continued during the quarter and is expected for the foreseeable future. Based on this robust demand and the limited supply of aircraft, we ordered additional large aircraft during and subsequent to the third quarter. We expect to realize the earnings power of our investments in these and other new aircraft when a significant number of our new aircraft are placed in service and contributing to our earnings in late fiscal 2008.”

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EST (9:00 a.m. CST) on Tuesday, February 6, 2007, to review financial results for the three and nine months ended December 31, 2006. 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 2007 Bristow Group Inc. Earnings Conference Call”

Replay: A replay via webcast will be available approximately one hour after the call’s completion

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

Via Telephone within U.S.:

Live: Dial toll free (800) 706-7749, passcode: 74135626

Replay: A telephone replay will be available through March 6, 2007, by dialing toll free (888) 286-8010, passcode: 44407139

Via Telephone outside the U.S.:

Live: Dial (617) 614-3474, passcode: 74135626

Replay: A telephone replay will be available through March 6, 2007 by dialing (617) 801-6888, passcode: 44407139

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is a leading provider of helicopter services to the worldwide energy industry. 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, Brazil, Mexico, Nigeria, Russia and Trinidad. Additionally, the Company is a leading provider of production management services for oil and gas production facilities in the U.S. Gulf of Mexico. The Company's Common Stock trades on the New York Stock Exchange under the symbol BRS.

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, future results, the addition of new aircraft to our fleet, future investments and earnings power of aircraft. 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 reports on Form 10-Q for each quarter during fiscal 2007 and the annual report on Form 10-K for the year ended March 31, 2006. 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.

Investor Relations Contact:

Joe Baj - Bristow Group Inc.

(713) 267-7605

- more -

(financial tables follow)

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

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

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2006			2005			2006			2005

Gross revenue:
Operating revenue from non-affiliates	$	191,301		$	155,864		$	564,426		$	470,531
Operating revenue from affiliates		10,701			13,715			34,411			37,994
Reimbursable revenue from non-affiliates		20,668			21,751			66,884			56,091
Reimbursable revenue from affiliates		1,172			937			3,392			2,993
		223,842			192,267			669,113			567,609
Operating expenses:
Direct costs		151,193			126,120			438,534			375,182
Reimbursable expense		21,488			22,050			69,266			58,114
Depreciation and amortization		11,060			10,653			32,080			32,160
General and administrative		20,164			15,338			52,040			46,005
Loss (gain) on disposal of assets		(1,042	)		374			(5,707	)		1,276
		202,863			174,535			586,213			512,737
Operating income		20,979			17,732			82,900			54,872
Earnings from unconsolidated affiliates, net of losses		2,106			1,351			5,393			1,770
Interest income		3,841			898			6,200			2,879
Interest expense		(2,539	)		(3,903	)		(8,646	)		(11,288	)
Other income (expense), net		(5,226	)		2,296			(11,319	)		4,308
Income before provision for income taxes and minority interest		19,161			18,374			74,528			52,541
Provision for income taxes		(8,453	)		(4,984	)		(26,724	)		(12,453	)
Minority interest		(257	)		10			(1,049	)		(84	)
Net income		10,451			13,400			46,755			40,004
Preferred stock dividends		(3,150	)		-			(3,471	)		-
Net income available to common stockholders	$	7,301		$	13,400		$	43,284		$	40,004

Earnings per common share:
Basic	$	0.31		$	0.57		$	1.85		$	1.71
Diluted	$	0.31		$	0.57		$	1.80		$	1.70
Preferred dividends declared per common share	$	0.13		$	-		$	0.13		$	-

Weighted average common shares outstanding:
Basic		23,506			23,343			23,428			23,335
Diluted		23,641			23,598			25,967			23,601

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

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

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2006		2005		2006		2005
Flight hours (excludes unconsolidated affiliates):
Helicopter Services:
North America		34,742		38,131		118,353		115,516
South and Central America		9,973		9,569		28,889		29,198
Europe		10,917		9,329		31,772		29,323
West Africa		9,733		8,867		27,795		25,836
Southeast Asia		3,059		3,117		9,328		8,844
Other International		2,641		1,728		7,119		5,020
Consolidated total		71,065		70,741		223,256		213,737

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2006			2005			2006			2005
Gross revenue:
Helicopter Services:
North America	$	62,758		$	56,869		$	195,863		$	170,571
South and Central America		13,488			11,427			40,130			31,811
Europe		73,256			59,998			216,767			181,903
West Africa		35,062			27,427			98,009			79,876
Southeast Asia		18,181			15,789			52,848			44,285
Other International		11,462			9,087			32,599			24,756
EH Centralized Operations		15,918			14,677			45,049			39,604
Intrasegment eliminations		(19,116	)		(16,676	)		(54,321	)		(48,811	)
Total Helicopter Services		211,009			178,598			626,944			523,995
Production Management Services		15,130			16,253			50,599			50,163
Corporate		-			8			(26	)		40
Intersegment eliminations		(2,297	)		(2,592	)		(8,404	)		(6,589	)
Consolidated total	$	223,842		$	192,267		$	669,113		$	567,609

Operating income:
Helicopter Services:
North America	$	9,078		$	8,785		$	29,341		$	33,159
South and Central America		2,993			1,391			9,904			2,006
Europe		3,803			3,628			21,278			20,553
West Africa		3,153			1,806			6,381			5,911
Southeast Asia		1,956			1,701			5,056			2,786
Other International		905			2,192			5,340			4,376
EH Centralized Operations		5,565			3,302			15,472			2,601
Total Helicopter Services		27,453			22,805			92,772			71,392
Production Management Services		739			1,117			3,546			3,675
Gain (loss) on disposal of assets		1,042			(373	)		5,707			(1,276	)
Corporate		(8,255	)		(5,817	)		(19,125	)		(18,919	)
Consolidated total	$	20,979		$	17,732		$	82,900		$	54,872

Operating margin:
Helicopter Services:
North America		14.5	%		15.4	%		15.0	%		19.4	%
South and Central America		22.2	%		12.2	%		24.7	%		6.3	%
Europe		5.2	%		6.0	%		9.8	%		11.3	%
West Africa		9.0	%		6.6	%		6.5	%		7.4	%
Southeast Asia		10.8	%		10.8	%		9.6	%		6.3	%
Other International		7.9	%		24.1	%		16.4	%		17.7	%
EH Centralized Operations		35.0	%		22.5	%		34.3	%		6.6	%
Total Helicopter Services		13.0	%		12.8	%		14.8	%		13.6	%
Production Management Services		4.9	%		6.9	%		7.0	%		7.3	%
Consolidated total		9.4	%		9.2	%		12.4	%		9.7	%

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

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

	December 31,			March 31,
	2006			2006
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	219,699		$	122,482
Accounts receivable from non-affiliates, net of allowance for doubtful accounts of $3.1 million and $4.6 million, respectively		163,361			144,521
Accounts receivable from affiliates, net of allowance for doubtful accounts of $4.1 million and $4.6 million, respectively		16,887			15,884
Inventories		161,067			147,860
Prepaid expenses and other		12,701			16,519
Total current assets		573,715			447,266
Investments in unconsolidated affiliates		42,969			39,912
Property and equipment -- at cost:
Land and buildings		48,918			40,672
Aircraft and equipment		1,079,273			838,314
		1,128,191			878,986
Less: accumulated depreciation and amortization		(302,877	)		(263,072	)
		825,314			615,914
Goodwill		20,478			26,837
Prepaid pension costs		45,125			37,207
Other assets		10,163			9,277
	$	1,517,764		$	1,176,413
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable	$	36,466		$	41,227
Accrued wages, benefits and related taxes		43,126			45,958
Income taxes payable		457			6,537
Other accrued taxes		8,647			6,471
Deferred revenues		14,127			9,994
Other accrued liabilities		37,149			31,083
Deferred taxes		10,892			5,025
Short-term borrowings and current maturities of long-term debt		22,198			17,634
Total current liabilities		173,062			163,929
Long-term debt, less current maturities		237,749			247,662
Accrued pension liabilities		153,609			136,521
Other liabilities and deferred credits		17,485			18,016
Deferred taxes		81,494			68,281
Minority interest		5,292			4,307
Commitments and contingencies

Stockholders' investment:
5.50% mandatory convertible preferred stock, $.01 par value, authorized and outstanding 4,600,000 shares; entitled on liquidation to $230 million; net of offering costs of $7.4 million		222,554			-
Common Stock, $0.01 par value, authorized 35,000,000 shares; outstanding: 23,534,536 shares as of December 31 and 23,385,473 shares as of March 31 (exclusive of 1,281,050 treasury shares)		235			234
Additional paid-in capital		166,559			158,762
Retained earnings		491,335			447,524
Accumulated other comprehensive loss		(31,610	)		(68,823	)
		849,073			537,697
	$	1,517,764		$	1,176,413

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

BRISTOW GROUP INC. AND SUBSIDIARIES

CORPORATE ITEMS AFFECTING THE COMPARABILITY OF RESULTS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	December 31, 2006						December 31, 2005
	Net Income Impact			Diluted Earnings Per Share Impact			Net Income Impact			Diluted Earnings Per Share Impact
Investigations:

SEC (1)	$	(2,067	)	$	(0.09	)	$	(1,790	)	$	(0.08	)

DOJ (2)		(462	)		(0.02	)		(712	)		(0.03	)

Acquisitions and divestitures:

Impairment of investment in Brazilian joint venture (3)		-			-			(758	)		(0.03	)

Expense of previously deferred acquisition costs (4)		(1,302	)		(0.06	)		-			-

Turbo asset sale (5)		(2,419	)		(0.10	)		-			-

Foreign currency transaction (gains) losses (6)		(2,352	)		(0.10	)		1,677			0.07

Preferred stock (7)		1,608			(0.07	)		-			-

Total	$	(6,994	)	$	(0.44	)	$	(1,583	)	$	(0.07	)

	Nine Months Ended
	December 31, 2006						December 31, 2005
	Net Income Impact			Diluted Earnings Per Share Impact			Net Income Impact			Diluted Earnings Per Share Impact
Investigations:

SEC (1)	$	(2,096	)	$	(0.08	)	$	(7,789	)	$	(0.33	)

DOJ (2)		(1,041	)		(0.04	)		(1,064	)		(0.05	)

Acquisitions and divestitures:

Impairment of investment in Brazilian joint venture (3)		-			-			(794	)		(0.03	)

Expense of previously deferred acquisition costs (4)		(1,275	)		(0.05	)		-			-

Turbo asset sale (5)		(2,421	)		(0.09	)		-			-

Foreign currency transaction (gains) losses (6)		(6,450	)		(0.25	)		4,044			0.17

Preferred stock (7)		1,758			(0.16	)		-			-

Total	$	(11,525	)	$	(0.67	)	$	(5,603	)	$	(0.24	)

Bristow Group Inc.

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Reports Fiscal 2007 Third Quarter Financial Results

__________

(1)

Represents costs incurred in conjunction with the SEC investigation regarding findings resulting from the internal review initiated by the Audit Committee of our board of directors in February 2005 to review certain payments made by two of our affiliated entities in a foreign country. The costs incurred for the three and nine months ended December 31, 2006 consist primarily of $3.0 million (pre-tax) recorded for costs and fees we currently expect to incur in connection with the resolution of the SEC investigation, a substantial portion of which relates to legal fees in connection with the investigation. There can be no assurance that the amounts currently recorded will be sufficient to resolve such matters or that such matters can ultimately be resolved until final action by the SEC.

(2)

Represents legal and other professional fees incurred in connection with a document subpoena received from the Antitrust Division of the 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.

(3)

Represents an impairment charge recorded during the three months ended December 31, 2005 to reduce the recorded value of our 50% investment in Aeroleo Taxi Aereo S.A. (“Aeroleo”), our Brazilian affiliate, as we expected at that time that our investment would not be recoverable. On December 22, 2006, we entered into an agreement to terminate our ownership interest in Aeroleo. The closing of this transaction is pending approval from a regulatory agency in that country and is expected to result in a pre-tax gain of approximately $2.5 million.

(4)

Represents expense recorded in December 2006 for acquisition costs previously deferred in connection with an acquisition we were evaluating as we determined that the acquisition is no longer probable.

(5)

On November 30, 2006, we completed a sale of the assets of our aircraft engine overhaul business, Turbo, to Timken Alcor Aerospace Technologies, Inc. (“Timken”) for approximately $14.6 million ($13.2 million of which was received in cash upon closing of the transaction), including estimated post-closing adjustments. The sale was effective November 30, 2006 and resulted in a pretax gain of $0.1 million. However, the transaction resulted in additional tax expense of $2.5 million related to non-deductible goodwill recorded at the time we acquired Turbo in 2001.

(6)

Represents foreign currency transaction gains and losses resulting from changes in exchange rates during the applicable periods, primarily related to the British pound sterling. These gains and losses arose primarily from U.S. dollar-denominated transactions entered into by Bristow Aviation Holdings, Ltd., one of our consolidated subsidiaries (whose functional currency is the British pound sterling). 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.

(7)

Represents the effect of the preferred stock offering completed in September and October 2006. The net income effect results from interest income earned on cash proceeds generated from the offering. Diluted earnings per share for the three months ended December 31, 2006 was reduced by the effect of the inclusion of preferred stock dividends in the calculation for that period, partially offset by the impact of higher interest income. Weighted-average earnings per share for the three months ended December 31, 2006 excluded the assumed conversion of preferred stock outstanding into common shares as the result of the inclusion of these shares and the adjustment for preferred stock dividends would have been anti-dilutive for the period. Diluted earnings per share for the nine months ended December 31, 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 (BRSWQ) 8-KBristow Group Inc. Reports Fiscal 2007 Third Quarter