Exhibit 99.1
FOR IMMEDIATE RELEASE
| | |
| | News Release |
| |
| | Linda McNeill |
| | Investor Relations |
| | (713) 267-7622 |
BRISTOW GROUP REPORTS FINANCIAL RESULTS FOR ITS
2013 FISCAL SECOND QUARTER AND SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2012
| | • | | QUARTER AND SIX MONTH GAAP NET INCOME OF $30 MILLION ($0.82 PER DILUTED SHARE) AND $53 MILLION ($1.46 PER DILUTED SHARE) |
| | • | | QUARTER AND SIX MONTH ADJUSTED NET INCOME OF $29 MILLION ($0.80 PER DILUTED SHARE) AND $58 MILLION ($1.60 PER DILUTED SHARE), WHICH EXCLUDES THE IMPACT OF ASSET DISPOSITIONS AND SPECIAL ITEMS |
| | • | | RECORD QUARTER AND SIX MONTH OPERATING REVENUE OF $326 MILLION AND $647 MILLION WITH QUARTER AND SIX MONTH OPERATING CASH FLOW OF $79 MILLION AND $135 MILLION |
| | • | | COMPANY REAFFIRMS GUIDANCE RANGE FOR FULL FISCAL YEAR 2013 ADJUSTED EPS AT $3.25 – $3.55 |
HOUSTON, November 7, 2012 – Bristow Group Inc. (NYSE: BRS) today reported net income for the September 2012 quarter of $29.7 million or $0.82 per diluted share compared to net income of $2.7 million or $0.07 per diluted share in the same period a year ago. Adjusted net income, which excludes asset disposition effects and special items, was $29.2 million or $0.80 per diluted share for the September 2012 quarter, an increase of $5.9 million or $0.17 per diluted share over the September 2011 quarter.
Operating revenue for the September 2012 quarter increased approximately 10% to $326.0 million from $297.1 million in the September 2011 quarter.
Adjusted earnings before interest, taxes, depreciation, amortization and rent (“Adjusted EBITDAR”), which excludes asset disposition effects and special items, was $84.9 million for the September 2012 quarter compared to $71.2 million in the same period a year ago. Net cash provided by operating activities totaled $79.5 million for the September 2012 quarter compared to $64.1 million in the September 2011 quarter. As of September 30, 2012, cash totaled $348.3 million and our total liquidity, which includes cash and borrowing available on our revolving credit facility, was $507.7 million.
Net income and diluted earnings per share increased significantly over the September 2011 quarter primarily as a result of the year-over-year increase in operating revenue, an $11.0 million increase in earnings from unconsolidated affiliates and the inclusion of $27.3 million in non-cash impairment charges in the September 2011 quarter.
1
The significant increase in earnings from unconsolidated affiliates relates to an improvement in earnings from our investment in Líder in Brazil primarily resulting from the impact of foreign currency exchange rate changes as the value of the Brazilian real has fluctuated significantly relative to the U.S. dollar and a $2.3 million correction of a calculation error related to foreign currency derivative transactions at Líder for the September 2012 quarter.
The year-over-year improvement in net income and diluted earnings per share was partially offset by the following:
| | • | | An $8.4 million increase in general and administrative expense, primarily resulting from an increase in incentive compensation as a result of our stock price out-performing our peers, |
| | • | | A $2.6 million allowance for doubtful accounts recorded for accounts receivable due from ATP Oil and Gas Corporation (“ATP”), a client in the U.S. Gulf of Mexico, that is no longer considered probable of collection due to their filing for bankruptcy, and |
| | • | | Increased rent expense resulting from increased leasing of aircraft as our operating lease strategy progresses. |
After adjusting for asset disposition effects and special items in the September 2012 and 2011 quarters, we realized an improvement in the financial measures used by management to assess and measure our financial performance, including a 19.2% improvement in adjusted EBITDAR, an improvement in adjusted EBITDAR margin from 24.0% to 26.1%, a 25.2% improvement in adjusted net income and a 27.0% improvement in adjusted diluted earnings per share. This improvement was driven by strong revenue performance and the increase in earnings from unconsolidated affiliates in the September 2012 quarter, partially offset by the increases in general and administrative expense, allowance for doubtful accounts and rent expense discussed above.
The allowance for doubtful accounts recorded for accounts receivable due from ATP, while not adjusted for in these non-GAAP measures, resulted in a $0.05 decrease in diluted earnings per share in the September 2012 quarter.
“The strong performance we experienced in our fiscal 2013 first quarter continued in the second quarter of fiscal 2013,” said William E. Chiles, President and Chief Executive Officer of Bristow Group. “We continue to benefit from a turnaround in Australia and the U.S. Gulf of Mexico as well as strength in the U.K. and Norway. Our fiscal 2013 and future year results should benefit further from the investment in Cougar Helicopters completed in October, along with financing transactions also completed in October to reduce our cost of capital.”
Mr. Chiles continued, “We are working hard to mitigate the impact of the recent suspension of flight operations of sixteen large EC225 and AS332L2 aircraft across our fleet. Despite this situation, we are still expecting the solid revenue growth experienced over the recent quarters to continue throughout the remainder of fiscal 2013, and anticipate stronger adjusted EBITDAR margins. During times like these, Bristow’s financial strength and commitment to operational excellence – to provide unmatched safety, reliability and hassle-free service – is a key difference maker for our clients. Our global management team is dedicated to continuing the service excellence we provide to our clients and is working hard every day for all our stakeholders.”
SECOND QUARTER FY2013 BUSINESS UNIT RESULTS
There continues to be strong demand for our services both from new and existing clients in the Northern North Sea and in Norway. To meet this demand, we have added new large aircraft to our Europe Business Unit over the past year. These new aircraft, as well as an overall increase in flying activity, led to a 10% increase in operating revenue and a 21% increase in adjusted EBITDAR over the September 2011 quarter. Adjusted EBITDAR margin of 34.6% improved from the prior year quarter’s margin of 31.4%. We executed operating leases for five large aircraft in this market in late fiscal year 2012 (one of which was a new delivery in the September 2012 quarter), contributing to the increase in adjusted EBITDAR margin.
2
Activity levels continue to be strong in our West Africa Business Unit, leading to a 7% increase in operating revenue over the September 2011 quarter. However, as a result of previously reported increases in maintenance costs, adjusted EBITDAR and adjusted EBITDAR margin decreased by 20% and 25%, respectively, compared with the September 2011 quarter. Maintenance expense increased primarily due to aircraft undergoing scheduled major maintenance during the September 2012 quarter.
As was the case in the first quarter of fiscal year 2012, the addition of S-92 large aircraft to our North America Business Unit continued to drive operating improvement in the U.S. Gulf of Mexico in the second fiscal quarter, along with the issuance of more drilling and completion permits. Operating revenue increased 19% resulting from the addition of the new large aircraft despite no significant change in flight hours from the September 2011 quarter. However, operating results in the September 2012 quarter were impacted by an allowance recorded against amounts due from ATP totaling $2.6 million. Excluding this allowance, adjusted EBITDAR margin was 25.3% for the quarter, up from 20.6% in the September 2011 quarter and 23.2% in the June 2012 quarter.
As a result of a 24% increase in flight activity in Australia, driven by new contracts and increased ad hoc work, operating revenue increased by 26% in the second fiscal quarter versus the September 2011 period. The increase in operating revenue along with a significant reduction in costs more than doubled Australia’s adjusted EBITDAR to $10.8 million in the September 2012 quarter and nearly doubled adjusted EBITDAR margins to 28.0% in the second fiscal quarter from 14.4% in the September 2011 quarter.
Our Other International Business Unit was positively affected by increased earnings from Líder in Brazil, which increased from a loss of $6.6 million in the September 2011 quarter to a gain of $4.6 million in the September 2012 quarter.
YTD FY2013 RESULTS
| | • | | Operating revenue increased 11% to $646.6 million compared to $583.8 million in the same period a year ago. |
| | • | | Operating income increased 90% to $87.3 million compared to $46.0 million in the same period a year ago. |
| | • | | Net income increased 125% to $53.3 million or $1.46 per diluted share compared to $23.8 million or $0.65 per diluted share in the same period a year ago. Adjusted net income increased 35% to $58.4 million or $1.60 per diluted share compared to $43.2 million or $1.18 per diluted share in the same period a year ago. |
| | • | | Adjusted EBITDAR increased 22% to $168.7 million compared to $138.3 million in the same period a year ago. Net cash provided by operating activities totaled $134.9 million compared to $117.0 million in the same period a year ago. |
RECENT AIRCRAFT INCIDENTS
On Monday, October 22, 2012, an incident occurred with an EC225 Super Puma helicopter operated by another helicopter company, which resulted in a controlled ditching on the North Sea, south of the Shetland Isles, U.K. Following the ditching, all 19 passengers and crew were recovered safely and without injuries.
Related to this incident, the Civil Aviation Authority (“CAA”) in the U.K. issued a safety directive on October 25, 2012, requiring operators to suspend operations of the affected aircraft. As a result, we will not be flying a total of sixteen large Eurocopter aircraft until further notice: eleven EC225 helicopters in the U.K., three EC225 helicopters in Australia, one EC225 helicopter in Norway and one AS332L2 helicopter in Nigeria. Our other aircraft, including search and rescue (“SAR”) aircraft, continue to operate globally.
3
In order to minimize or eliminate the impact on our clients, we have increased utilization of other in-region aircraft and have implemented contingency plans designed to mobilize additional available aircraft, including entering into an agreement on November 7, 2012 to order ten Sikorsky S-92 large aircraft and obtain options for 16 Sikorsky S-92 large aircraft. An incident involving another operator and an EC225 helicopter in May 2012 that resulted in a similar directive did not have a material financial impact on our company. However, we are unable to determine whether this incident on October 22 and the resulting actions taken by the CAA could have a material effect on our business, financial condition or results of operations at this time.
COUGAR INVESTMENT
In early October 2012, we completed the acquisition of 40 newly issued Class B shares (“Class B Shares”) in the capital of Cougar Helicopters Inc. (“Cougar”), the largest offshore energy and search and rescue (“SAR”) helicopter service provider in Canada, and certain aircraft and facilities used by Cougar in its operations, for $250 million, of which $23.8 million had been previously paid for an aircraft and certain other advances, resulting in a net cash outlay of $226.2 million. Cougar’s operations are primarily focused on serving the offshore oil and gas industry off Canada’s Atlantic coast and in the Arctic. The operating assets purchased include eight Sikorsky S-92 large helicopters, inventory and helicopter passenger, maintenance and SAR facilities located in St. John’s, Newfoundland and Labrador and Halifax, Nova Scotia. The purchased aircraft and facilities are leased to Cougar on a long-term basis. The Class B Shares represent 25% of the voting power and 40% of the economic interests in Cougar. Additionally, the terms of the purchase agreement include a potential earn-out of $40 million payable over three years based on Cougar achieving certain agreed performance targets.
FINANCING ACTIVITY
Subsequent to September 30, 2012, we raised $675 million through the offering of $450 million 6 1/4% senior notes due 2011 (“6 1/4% senior notes”) and proceeds from a $225 million 364-day term loan (“364-day term loan”). Net proceeds for the issuance of the 6 1/4% senior notes are being used to purchase and redeem 100% of our $350 million 7 1/2% senior notes due 2017 and for general corporate purposes, and proceeds from the 364-day term loan were used to complete the Cougar investment.
DIVIDEND AND SHARE REPURCHASE AUTHORIZATION
On November 2, 2012, our Board of Directors declared a seventh consecutive quarterly dividend. This dividend of $0.20 per share will be paid on December 14, 2012 to shareholders of record on November 30, 2012. Based on shares outstanding at September 30, 2012, total dividend payments will be approximately $7.2 million. Also on November 2, 2012, our Board of Directors authorized the expenditure of up to $100 million to repurchase shares of our common stock up to 12 months from that date.
GUIDANCE
Bristow is reaffirming today the adjusted earnings per share guidance provided in May 2012 for the full fiscal year 2013 of $3.25 to $3.55.
“Our 2013 guidance reaffirmation is based on the results of our strong first half performance for the fiscal year and the contribution expected from our recent investment in Cougar, taking into account uncertainty around the recent suspension of operations of EC225 and AS332L2 aircraft” said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. “In addition to the stronger performance and earnings per share growth year over year, we continued to generate significant operating cash flow. This is a testament to the hard work and proven results of our global operations and commercial teams.”
4
As a reminder, our 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. This guidance is based on current foreign currency exchange rates. In providing this guidance, we have not included the impact of any changes in accounting standards nor any impact from significant acquisitions and divestitures. Changes in events or other circumstances that we cannot currently anticipate or predict could result in earnings per share for fiscal year 2013 that are significantly above or below this guidance, including the impact of the recent suspension of operations of certain aircraft and changes in the market and industry. 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 Thursday, November 8, 2012 to review financial results for the fiscal year 2013 second quarter ended September 30, 2012. This release and the most recent investor slide presentation are available in the investor relations area of our web page atwww.bristowgroup.com. The conference call can be accessed as follows:
Via Webcast:
| | • | | Visit Bristow Group’s investor relations Web page atwww.bristowgroup.com |
| | • | | Live: Click on the link for “Bristow Group Fiscal 2013 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 1-800-762-8779 |
| | • | | Replay: A telephone replay will be available through November 22, 2012 and may be accessed by calling toll free 1-800-406-7325, passcode: 4567605# |
Via Telephone outside the U.S.:
| | • | | Live: Dial 1-480-629-9645 |
| | • | | Replay: A telephone replay will be available through November 22, 2012 and may be accessed by calling 1-303-590-3030, passcode: 4567605# |
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, Canada, Russia and Trinidad. For more information, visit the Company’s website atwww.bristowgroup.com.
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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, revenue growth, margins, the impact of activity levels, business performance, the October 2012 incident and resulting actions taken by the CAA in the U.K., 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 September 30, 2012 and the annual report on Form 10-K for the fiscal year ended March 31, 2012. 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.
(financial tables follow)
6
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share
amounts, percentages and flight hours)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Six Months Ended
September 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| | | | |
Gross revenue: | | | | | | | | | | | | | | | | |
Operating revenue from non-affiliates | | $ | 319,663 | | | $ | 288,780 | | | $ | 634,512 | | | $ | 565,809 | |
Operating revenue from affiliates | | | 6,288 | | | | 8,276 | | | | 12,093 | | | | 18,008 | |
Reimbursable revenue from non-affiliates | | | 39,719 | | | | 33,673 | | | | 81,673 | | | | 67,974 | |
Reimbursable revenue from affiliates | | | 84 | | | | 263 | | | | 84 | | | | 306 | |
| | | | | | | | | | | | | | | | |
| | | 365,754 | | | | 330,992 | | | | 728,362 | | | | 652,097 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating expense: | | | | | | | | | | | | | | | | |
Direct cost | | | 224,495 | | | | 203,635 | | | | 447,263 | | | | 400,257 | |
Reimbursable expense | | | 38,634 | | | | 32,770 | | | | 78,806 | | | | 65,904 | |
Impairment of inventories | | | — | | | | 24,610 | | | | — | | | | 24,610 | |
Depreciation and amortization | | | 23,321 | | | | 25,431 | | | | 44,693 | | | | 48,139 | |
General and administrative | | | 37,708 | | | | 29,303 | | | | 72,685 | | | | 68,948 | |
| | | | | | | | | | | | | | | | |
| | | 324,158 | | | | 315,749 | | | | 643,447 | | | | 607,858 | |
| | | | | | | | | | | | | | | | |
| | | | |
Loss on disposal of assets | | | (1,262 | ) | | | (1,611 | ) | | | (6,577 | ) | | | (195 | ) |
Earnings from unconsolidated affiliates, net of losses | | | 6,994 | | | | (4,037 | ) | | | 8,983 | | | | 1,956 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 47,328 | | | | 9,595 | | | | 87,321 | | | | 46,000 | |
| | | | |
Interest income | | | 263 | | | | 153 | | | | 351 | | | | 324 | |
Interest expense | | | (8,597 | ) | | | (9,459 | ) | | | (17,371 | ) | | | (18,414 | ) |
Other income (expense), net | | | (218 | ) | | | 727 | | | | (1,149 | ) | | | 931 | |
| | | | | | | | | | | | | | | | |
Income before (provision) benefit for income taxes | | | 38,776 | | | | 1,016 | | | | 69,152 | | | | 28,841 | |
(Provision) benefit for income taxes | | | (8,342 | ) | | | 1,945 | | | | (14,522 | ) | | | (4,661 | ) |
| | | | | | | | | | | | | | | | |
Net income | | | 30,434 | | | | 2,961 | | | | 54,630 | | | | 24,180 | |
Net income attributable to noncontrolling interests | | | (766 | ) | | | (250 | ) | | | (1,300 | ) | | | (424 | ) |
| | | | | | | | | | | | | | | | |
Net income attributable to Bristow Group | | $ | 29,668 | | | $ | 2,711 | | | $ | 53,330 | | | $ | 23,756 | |
| | | | | | | | | | | | | | | | |
| | | | |
Diluted earnings per common share | | $ | 0.82 | | | $ | 0.07 | | | $ | 1.46 | | | $ | 0.65 | |
Operating margin | | | 14.5 | % | | | 3.2 | % | | | 13.5 | % | | | 7.9 | % |
Flight hours | | | 55,038 | | | | 56,005 | | | | 110,166 | | | | 110,061 | |
| | | | |
Non-GAAP financial measures: | | | | | | | | | | | | | | | | |
Adjusted operating income | | $ | 46,274 | | | $ | 38,493 | | | $ | 93,276 | | | $ | 73,482 | |
Adjusted operating margin | | | 14.2 | % | | | 13.0 | % | | | 14.4 | % | | | 12.6 | % |
Adjusted EBITDAR | | $ | 84,922 | | | $ | 71,235 | | | $ | 168,727 | | | $ | 138,260 | |
Adjusted EBITDAR margin | | | 26.1 | % | | | 24.0 | % | | | 26.1 | % | | | 23.7 | % |
Adjusted net income | | $ | 29,153 | | | $ | 23,287 | | | $ | 58,425 | | | $ | 43,227 | |
Adjusted diluted earnings per share | | $ | 0.80 | | | $ | 0.63 | | | $ | 1.60 | | | $ | 1.18 | |
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BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| | | | | | | | |
| | | September 30,
2012 | | | March 31,
2012 | |
| | |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 348,349 | | | $ | 261,550 | |
Accounts receivable from non-affiliates | | | 263,232 | | | | 280,985 | |
Accounts receivable from affiliates | | | 3,640 | | | | 5,235 | |
Inventories | | | 158,949 | | | | 157,825 | |
Assets held for sale | | | 19,552 | | | | 18,710 | |
Prepaid expenses and other current assets | | | 18,083 | | | | 12,168 | |
| | | | | | | | |
Total current assets | | | 811,805 | | | | 736,473 | |
Investment in unconsolidated affiliates | | | 214,620 | | | | 205,100 | |
Property and equipment – at cost: | | | | | | | | |
Land and buildings | | | 84,068 | | | | 80,835 | |
Aircraft and equipment | | | 2,064,285 | | | | 2,099,642 | |
| | | | | | | | |
| | | 2,148,353 | | | | 2,180,477 | |
Less – Accumulated depreciation and amortization | | | (463,913 | ) | | | (457,702 | ) |
| | | | | | | | |
| | | 1,684,440 | | | | 1,722,775 | |
Goodwill | | | 29,789 | | | | 29,644 | |
Other assets | | | 44,814 | | | | 46,371 | |
| | | | | | | | |
Total assets | | $ | 2,785,468 | | | $ | 2,740,363 | |
| | | | | | | | |
| | |
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 55,650 | | | $ | 56,084 | |
Accrued wages, benefits and related taxes | | | 44,590 | | | | 44,325 | |
Income taxes payable | | | 12,814 | | | | 9,732 | |
Other accrued taxes | | | 8,226 | | | | 5,486 | |
Deferred revenue | | | 12,551 | | | | 14,576 | |
Accrued maintenance and repairs | | | 18,790 | | | | 14,252 | |
Accrued interest | | | 2,258 | | | | 2,300 | |
Other accrued liabilities | | | 27,013 | | | | 23,005 | |
Deferred taxes | | | 15,165 | | | | 15,070 | |
Short-term borrowings and current maturities of long-term debt | | | 18,750 | | | | 14,375 | |
| | | | | | | | |
Total current liabilities | | | 215,807 | | | | 199,205 | |
Long-term debt, less current maturities | | | 715,936 | | | | 742,870 | |
Accrued pension liabilities | | | 112,221 | | | | 111,742 | |
Other liabilities and deferred credits | | | 17,403 | | | | 16,768 | |
Deferred taxes | | | 143,912 | | | | 147,954 | |
Stockholders’ investment: | | | | | | | | |
Common stock | | | 365 | | | | 363 | |
Additional paid-in capital | | | 717,347 | | | | 703,628 | |
Retained earnings | | | 1,032,468 | | | | 993,435 | |
Accumulated other comprehensive loss | | | (154,614 | ) | | | (159,239 | ) |
Treasury shares, at cost (526,895 shares) | | | (25,085 | ) | | | (25,085 | ) |
| | | | | | | | |
Total Bristow Group Inc. stockholders’ investment | | | 1,570,481 | | | | 1,513,102 | |
Noncontrolling interests | | | 9,708 | | | | 8,722 | |
| | | | | | | | |
Total stockholders’ investment | | | 1,580,189 | | | | 1,521,824 | |
| | | | | | | | |
Total liabilities and stockholders’ investment | | $ | 2,785,468 | | | $ | 2,740,363 | |
| | | | | | | | |
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BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | |
| | | Six Months Ended
September 30, | |
| | | 2012 | | | 2011 | |
| | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 54,630 | | | $ | 24,180 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 44,693 | | | | 48,139 | |
Deferred income taxes | | | (4,592 | ) | | | (10,237 | ) |
Discount amortization on long-term debt | | | 1,772 | | | | 1,666 | |
Loss on disposal of assets | | | 6,577 | | | | 195 | |
Impairment of inventories | | | — | | | | 24,610 | |
Stock-based compensation | | | 5,523 | | | | 7,480 | |
Equity in earnings from unconsolidated affiliates less than (in excess of) dividends received | | | (2,866 | ) | | | 5,285 | |
Tax benefit related to stock-based compensation | | | (433 | ) | | | (109 | ) |
Increase (decrease) in cash resulting from changes in: | | | | | | | | |
Accounts receivable | | | 20,786 | | | | (6,352 | ) |
Inventories | | | (46 | ) | | | 7,916 | |
Prepaid expenses and other assets | | | 729 | | | | 3,297 | |
Accounts payable | | | (3,426 | ) | | | 5,382 | |
Accrued liabilities | | | 11,777 | | | | 4,863 | |
Other liabilities and deferred credits | | | (226 | ) | | | 678 | |
| | | | | | | | |
Net cash provided by operating activities | | | 134,898 | | | | 116,993 | |
| | |
Cash flows from investing activities: | | | | | | | | |
Capital expenditures | | | (113,405 | ) | | | (149,262 | ) |
Proceeds from asset dispositions | | | 96,376 | | | | 12,040 | |
Investment in unconsolidated affiliates | | | (7,153 | ) | | | — | |
| | | | | | | | |
Net cash used in investing activities | | | (24,182 | ) | | | (137,222 | ) |
| | |
Cash flows from financing activities: | | | | | | | | |
Proceeds from borrowings | | | — | | | | 88,493 | |
Repayment of debt | | | (24,300 | ) | | | (32,518 | ) |
Partial prepayment of put/call obligation | | | (33 | ) | | | (31 | ) |
Acquisition of noncontrolling interests | | | — | | | | (262 | ) |
Common stock dividends paid | | | (14,297 | ) | | | (10,833 | ) |
Issuance of common stock | | | 7,869 | | | | 1,629 | |
Tax benefit related to stock-based compensation | | | 433 | | | | 109 | |
| | | | | | | | |
Net cash provided by (used in) financing activities | | | (30,328 | ) | | | 46,587 | |
Effect of exchange rate changes on cash and cash equivalents | | | 6,411 | | | | (2,440 | ) |
| | | | | | | | |
Net increase in cash and cash equivalents | | | 86,799 | | | | 23,918 | |
Cash and cash equivalents at beginning of period | | | 261,550 | | | | 116,361 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 348,349 | | | $ | 140,279 | |
| | | | | | | | |
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BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Six Months Ended
September 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Flight hours (excludes Bristow Academy and unconsolidated affiliates): | | | | | | | | | | | | | | | | |
Europe | | | 15,900 | | | | 15,341 | | | | 33,136 | | | | 29,523 | |
West Africa | | | 10,635 | | | | 10,620 | | | | 21,389 | | | | 20,249 | |
North America | | | 20,561 | | | | 20,858 | | | | 40,730 | | | | 41,292 | |
Australia | | | 2,961 | | | | 2,379 | | | | 5,753 | | | | 5,761 | |
Other International | | | 4,981 | | | | 6,807 | | | | 9,158 | | | | 13,236 | |
| | | | | | | | | | | | | | | | |
| | | 55,038 | | | | 56,005 | | | | 110,166 | | | | 110,061 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating revenue: | | | | | | | | | | | | | | | | |
Europe | | $ | 124,993 | | | $ | 113,702 | | | $ | 248,228 | | | $ | 221,990 | |
West Africa | | | 65,273 | | | | 61,076 | | | | 131,628 | | | | 113,327 | |
North America | | | 56,982 | | | | 47,860 | | | | 109,607 | | | | 91,773 | |
Australia | | | 38,448 | | | | 30,469 | | | | 76,619 | | | | 71,389 | |
Other International | | | 32,085 | | | | 35,191 | | | | 65,312 | | | | 69,740 | |
Corporate and other | | | 8,817 | | | | 9,435 | | | | 16,237 | | | | 16,282 | |
Intrasegment eliminations | | | (647 | ) | | | (677 | ) | | | (1,026 | ) | | | (684 | ) |
| | | | | | | | | | | | | | | | |
Consolidated total | | $ | 325,951 | | | $ | 297,056 | | | $ | 646,605 | | | $ | 583,817 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating income (loss): | | | | | | | | | | | | | | | | |
Europe | | $ | 27,008 | | | $ | 23,586 | | | $ | 48,884 | | | $ | 46,835 | |
West Africa | | | 13,430 | | | | 16,120 | | | | 29,561 | | | | 27,351 | |
North America | | | 6,130 | | | | 2,571 | | | | 12,605 | | | | 4,155 | |
Australia | | | 6,829 | | | | 576 | | | | 13,338 | | | | 5,100 | |
Other International | | | 10,354 | | | | 2,089 | | | | 17,741 | | | | 13,999 | |
Corporate and other | | | (15,161 | ) | | | (33,736 | ) | | | (28,231 | ) | | | (51,245 | ) |
Loss on disposal of assets | | | (1,262 | ) | | | (1,611 | ) | | | (6,577 | ) | | | (195 | ) |
| | | | | | | | | | | | | | | | |
Consolidated total | | $ | 47,328 | | | $ | 9,595 | | | $ | 87,321 | | | $ | 46,000 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating margin: | | | | | | | | | | | | | | | | |
Europe | | | 21.6 | % | | | 20.7 | % | | | 19.7 | % | | | 21.1 | % |
West Africa | | | 20.6 | % | | | 26.4 | % | | | 22.5 | % | | | 24.1 | % |
North America | | | 10.8 | % | | | 5.4 | % | | | 11.5 | % | | | 4.5 | % |
Australia | | | 17.8 | % | | | 1.9 | % | | | 17.4 | % | | | 7.1 | % |
Other International | | | 32.3 | % | | | 5.9 | % | | | 27.2 | % | | | 20.1 | % |
Consolidated total | | | 14.5 | % | | | 3.2 | % | | | 13.5 | % | | | 7.9 | % |
| | | | |
Adjusted EBITDAR: | | | | | | | | | | | | | | | | |
Europe | | $ | 43,245 | | | $ | 35,690 | | | $ | 82,909 | | | $ | 71,390 | |
West Africa | | | 17,297 | | | | 21,659 | | | | 38,460 | | | | 37,089 | |
North America | | | 11,767 | | | | 9,848 | | | | 23,967 | | | | 16,115 | |
Australia | | | 10,766 | | | | 4,397 | | | | 21,091 | | | | 12,678 | |
Other International | | | 14,169 | | | | 6,708 | | | | 25,715 | | | | 23,332 | |
Corporate and other | | | (12,322 | ) | | | (7,067 | ) | | | (23,415 | ) | | | (22,344 | ) |
| | | | | | | | | | | | | | | | |
Consolidated total | | $ | 84,922 | | | $ | 71,235 | | | $ | 168,727 | | | $ | 138,260 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted EBITDAR margin: | | | | | | | | | | | | | | | | |
Europe | | | 34.6 | % | | | 31.4 | % | | | 33.4 | % | | | 32.2 | % |
West Africa | | | 26.5 | % | | | 35.5 | % | | | 29.2 | % | | | 32.7 | % |
North America | | | 20.7 | % | | | 20.6 | % | | | 21.9 | % | | | 17.6 | % |
Australia | | | 28.0 | % | | | 14.4 | % | | | 27.5 | % | | | 17.8 | % |
Other International | | | 44.2 | % | | | 19.1 | % | | | 39.4 | % | | | 33.5 | % |
Consolidated total | | | 26.1 | % | | | 24.0 | % | | | 26.1 | % | | | 23.7 | % |
10
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
As of September 30, 2012
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Aircraft in Consolidated Fleet | | | | | | | |
| | | Helicopters | | | | | | | | | | | | | |
| | | Small | | | Medium | | | Large | | | Training | | | Fixed
Wing | | | Total
(1)(2) | | | Unconsolidated
Affiliates (3) | | | Total | |
Europe | | | — | | | | 12 | | | | 43 | | | | — | | | | — | | | | 55 | | | | 64 | | | | 119 | |
West Africa | | | 10 | | | | 25 | | | | 7 | | | | — | | | | 3 | | | | 45 | | | | — | | | | 45 | |
North America | | | 67 | | | | 24 | | | | 2 | | | | — | | | | — | | | | 93 | | | | — | | | | 93 | |
Australia | | | 2 | | | | 10 | | | | 13 | | | | — | | | | — | | | | 25 | | | | — | | | | 25 | |
Other International | | | 4 | | | | 36 | | | | 14 | | | | — | | | | — | | | | 54 | | | | 133 | | | | 187 | |
Corporate and other | | | — | | | | — | | | | — | | | | 77 | | | | — | | | | 77 | | | | — | | | | 77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 83 | | | | 107 | | | | 79 | | | | 77 | | | | 3 | | | | 349 | | | | 197 | | | | 546 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Aircraft not currently in fleet: (4)(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
On order | | | — | | | | — | | | | 30 | | | | — | | | | — | | | | 30 | | | | | | | | | |
Under option | | | — | | | | 12 | | | | 37 | | | | — | | | | — | | | | 49 | | | | | | | | | |
| (1) | Includes 20 aircraft held for sale and 57 leased aircraft as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Held for Sale Aircraft in Consolidated Fleet | |
| | | Helicopters | | | | | | | |
| | | Small | | | Medium | | | Large | | | Training | | | Fixed
Wing | | | Total | |
Europe | | | — | | | | 2 | | | | 3 | | | | — | | | | — | | | | 5 | |
West Africa | | | — | | | | 1 | | | | — | | | | — | | | | — | | | | 1 | |
North America | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Australia | | | — | | | | 2 | | | | 1 | | | | — | | | | — | | | | 3 | |
Other International | | | 1 | | | | 10 | | | | — | | | | — | | | | — | | | | 11 | |
Corporate and other | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | | 15 | | | | 4 | | | | — | | | | — | | | | 20 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Leased Aircraft in Consolidated Fleet | |
| | | Helicopters | | | | | | | |
| | | Small | | | Medium | | | Large | | | Training | | | Fixed
Wing | | | Total | |
Europe | | | — | | | | — | | | | 7 | | | | — | | | | — | | | | 7 | |
West Africa | | | — | | | | 1 | | | | — | | | | — | | | | — | | | | 1 | |
North America | | | 1 | | | | 11 | | | | 2 | | | | — | | | | — | | | | 14 | |
Australia | | | 2 | | | | — | | | | 3 | | | | — | | | | — | | | | 5 | |
Other International | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Corporate and other | | | — | | | | — | | | | — | | | | 30 | | | | — | | | | 30 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 3 | | | | 12 | | | | 12 | | | | 30 | | | | — | | | | 57 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | The average age of our fleet, excluding training aircraft, was 12 years as of September 30, 2012. |
| (3) | The 197 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. |
| (4) | This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option. |
| (5) | On November 7, 2012, we entered into an agreement to order ten Sikorsky S-92 large aircraft and obtain options for 16 Sikorsky S-92 large aircraft, which are reflected in this table. The aircraft orders have delivery dates in fiscal years 2014 and 2015. The aircraft options have delivery dates ranging from fiscal years 2015 to 2018. |
11
BRISTOW GROUP INC. AND SUBSIDIARIES
GAAP RECONCILIATIONS
These financial measures have not been prepared in accordance with generally accepted accounting principles (“GAAP”) and have not been audited or reviewed by our independent auditor. These financial measures are therefore considered non-GAAP financial measures. Adjusted EBITDAR is calculated by taking our net income and adjusting for interest expense, depreciation and amortization, rent expense, benefit (provision) for income taxes, gain (loss) on disposal of assets and special items, if any. Adjusted operating income, adjusted net income and adjusted diluted earnings per share are each adjusted for gain (loss) on disposal of assets and special items, if any, during the reported periods. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding our results because they exclude amounts that management does not consider when assessing and measuring the operational and financial performance of the organization. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Six Months Ended
September 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| | | (In thousands, except per share amounts) (Unaudited) | |
| | | | |
Adjusted operating income | | $ | 46,274 | | | $ | 38,493 | | | $ | 93,276 | | | $ | 73,482 | |
Loss on disposal of assets | | | (1,262 | ) | | | (1,611 | ) | | | (6,577 | ) | | | (195 | ) |
Special items | | | 2,316 | | | | (27,287 | ) | | | 622 | | | | (27,287 | ) |
| | | | | | | | | | | | | | | | |
Operating income | | $ | 47,328 | | | $ | 9,595 | | | $ | 87,321 | | | $ | 46,000 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted EBITDAR | | $ | 84,922 | | | $ | 71,235 | | | $ | 168,727 | | | $ | 138,260 | |
Loss on disposal of assets | | | (1,262 | ) | | | (1,611 | ) | | | (6,577 | ) | | | (195 | ) |
Special items | | | 2,316 | | | | (24,610 | ) | | | 622 | | | | (24,610 | ) |
Depreciation and amortization | | | (23,321 | ) | | | (25,431 | ) | | | (44,693 | ) | | | (48,139 | ) |
Rent expense | | | (15,282 | ) | | | (9,108 | ) | | | (31,556 | ) | | | (18,061 | ) |
Interest expense | | | (8,597 | ) | | | (9,459 | ) | | | (17,371 | ) | | | (18,414 | ) |
(Provision) benefit for income taxes | | | (8,342 | ) | | | 1,945 | | | | (14,522 | ) | | | (4,661 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 30,434 | | | $ | 2,961 | | | $ | 54,630 | | | $ | 24,180 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted net income | | $ | 29,153 | | | $ | 23,287 | | | $ | 58,425 | | | $ | 43,227 | |
Loss on disposal of assets (i) | | | (990 | ) | | | (1,257 | ) | | | (5,196 | ) | | | (152 | ) |
Special items (i) | | | 1,505 | | | | (19,319 | ) | | | 101 | | | | (19,319 | ) |
| | | | | | | | | | | | | | | | |
Net income attributable to Bristow Group | | $ | 29,668 | | | $ | 2,711 | | | $ | 53,330 | | | $ | 23,756 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted diluted earnings per share | | $ | 0.80 | | | $ | 0.63 | | | $ | 1.60 | | | $ | 1.18 | |
Loss on disposal of assets (i) | | | (0.03 | ) | | | (0.03 | ) | | | (0.14 | ) | | | — | |
Special items (i) | | | 0.04 | | | | (0.53 | ) | | | — | | | | (0.53 | ) |
Diluted earnings per share | | | 0.82 | | | | 0.07 | | | | 1.46 | | | | 0.65 | |
| (i) | These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per share impact. |
12
A correction of a calculation error related to Líder has been identified as a special item for the September 2012 quarter and non-cash impairment charges related to inventory spare parts and the abandonment of assets at the Creole, Louisiana location have been identified as special items for the September 2011 quarter, as they are not considered by management to be part of our normal and recurring operations when assessing and measuring the operational and financial performance of the organization. The impact of these items on our adjusted operating income, adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share is as follows:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, 2012 | |
| | | Adjusted
Operating
Income | | | Adjusted
EBITDAR | | | Adjusted
Net
Income | | | Adjusted
Diluted
Earnings
Per
Share | |
| | | (In thousands, except per share amounts) | |
Líder correction | | $ | (2,316 | ) | | $ | (2,316 | ) | | $ | (1,505 | ) | | $ | (0.04 | ) |
| | | | | | | | | | | | | | | | |
Total special items | | $ | (2,316 | ) | | $ | (2,316 | ) | | $ | (1,505 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, 2011 | |
| | | Adjusted
Operating
Income | | | Adjusted
EBITDAR | | | Adjusted
Net
Income | | | Adjusted
Diluted
Earnings
Per
Share | |
| | | (In thousands, except per share amounts) | |
Impairment of inventories | | $ | 24,610 | | | $ | 24,610 | | | $ | 17,579 | | | $ | 0.48 | |
Impairment of assets in Creole, Louisiana | | | 2,677 | | | | — | | | | 1,740 | | | | 0.05 | |
| | | | | | | | | | | | | | | | |
Total special items | | $ | 27,287 | | | $ | 24,610 | | | $ | 19,319 | | | | 0.53 | |
| | | | | | | | | | | | | | | | |
A correction of a calculation error related to Líder and the severance costs in the Southern North Sea have been identified as special items for the six months ended September 30, 2012 and non-cash impairment charges related to inventory spare parts and the abandonment of assets at the Creole, Louisiana location have been identified as special items for the six months ended September 30, 2011, as they are not considered by management to be part of our normal and recurring operations when assessing and measuring the operational and financial performance of the organization. The impact of these items on our adjusted operating income, adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share is as follows:
| | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2012 | |
| | | Adjusted
Operating
Income | | | Adjusted
EBITDAR | | | Adjusted
Net
Income | | | Adjusted
Diluted
Earnings
Per
Share | |
| | | (In thousands, except per share amounts) | |
Líder correction | | $ | (2,784 | ) | | $ | (2,784 | ) | | $ | (1,809 | ) | | $ | (0.05 | ) |
Severance costs for termination of contract | | | 2,162 | | | | 2,162 | | | | 1,708 | | | | 0.05 | |
| | | | | | | | | | | | | | | | |
Total special items | | $ | (622 | ) | | $ | (622 | ) | | $ | (101 | ) | | | — | |
| | | | | | | | | | | | | | | | |
| |
| | | Six Months Ended September 30, 2011 | |
| | | Adjusted
Operating
Income | | | Adjusted
EBITDAR | | | Adjusted
Net
Income | | | Adjusted
Diluted
Earnings
Per
Share | |
| | | (In thousands, except per share amounts) | |
Impairment of inventories | | $ | 24,610 | | | $ | 24,610 | | | $ | 17,579 | | | $ | 0.48 | |
Impairment of assets in Creole, Louisiana | | | 2,677 | | | | — | | | | 1,740 | | | | 0.05 | |
| | | | | | | | | | | | | | | | |
Total special items | | $ | 27,287 | | | $ | 24,610 | | | $ | 19,319 | | | | 0.53 | |
| | | | | | | | | | | | | | | | |
# # #
13
