SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM TO
Commission file number 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its Charter)
Louisiana 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5728 JEFFERSON HIGHWAY
P. O. BOX 23502
NEW ORLEANS, LOUISIANA 70183
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(504) 733-6790
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at 12/2/94
Voting Common Stock 3,278,068
Non-Voting Common Stock 2,200,000
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands October 31, April 30,
(Current period unaudited) 1994 1994 (1)
ASSETS
Current assets:
Cash and cash equivalents $ 1,504 $ 5,452
Accounts receivable - net
of allowance 31,238 27,759
Inventory 24,747 24,850
Prepaid expenses 1,027 1,446
Refundable income taxes - 196
______ _______
Total current assets 58,516 59,703
______ _______
Notes receivable - 290
Investments 1,162 597
Property and equipment:
Cost 197,872 194,810
Less accumulated depreciation (111,009) (109,171)
86,863 85,639
Other assets 104 83
$ 146,645 $ 146,312
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 18,459 $ 15,740
Accrued vacation pay 4,687 4,687
Income taxes payable 738 -
Current portion of long-term debt 8,229 8,704
Total current liabilities 32,113 29,131
Long-term debt 26,694 31,849
Deferred income taxes 10,023 10,023
Stockholders' equity:
Voting common stock 273 273
Non-voting common stock 183 183
Additional paid-in capital 11,027 11,027
Retained earnings 66,332 63,826
77,815 75,309
$ 146,645 $ 146,312
======= =======
(1)The balance sheet at April 30, 1994 is condensed from the
audited financial statements at that date.
See notes to condensed consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
In thousands, Three Months Ended Six Months Ended
except per October 31, October 31,
share amounts 1994 1993 1994 1993
(unaudited)
REVENUES:
Operating revenues $ 44,841 $ 47,658 $ 88,398 $ 95,276
Gain on equipment
disposals 184 397 956 441
Equity in net earnings
of investee companies 20 (12) 81 3
45,045 48,043 89,435 95,720
EXPENSES:
Direct expenses 39,267 44,170 78,517 86,720
Selling, general and
administrative expenses 2,626 2,373 5,074 4,797
Interest expense 732 728 1,488 1,330
42,625 47,271 85,079 92,847
Earnings before income
taxes 2,420 772 4,356 2,873
Income taxes 965 299 1,740 1,149
Net earnings $ 1,455 $ 473 $ 2,616 $ 1,724
====== ====== ====== ======
Net earnings per share $ .27 $ .08 $ .48 $ .31
====== ====== ====== ======
Weighted average common
shares outstanding 5,478 5,478 5,478 5,478
====== ====== ====== ======
Dividends paid per common
share $ .02 $ -0- $ .02 $ -0-
====== ====== ====== ======
See notes to condensed consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Six Months Ended October 31,
(unaudited) 1994 1993
OPERATING ACTIVITIES:
Net earnings $ 2,616 $ 1,724
Depreciation 4,152 4,095
Gain on equipment disposals (956) (441)
Equity in net earnings
of investee companies (81) (3)
Changes in operating assets
and liabilities 484 1,700
Net cash provided by operating
activities 6,215 7,075
INVESTING ACTIVITIES:
Purchases of property and
equipment (6,348) (8,786)
Proceeds from equipment disposals 1,925 846
Net cash used by
investing activities (4,423) (7,940)
FINANCING ACTIVITIES:
Proceeds from long-term debt 4,500 29,030
Payments on long-term debt (10,130) (26,217)
Dividends paid (110) -
Net cash provided (used) by
financing activities (5,740) 2,813
Increase (decrease) in cash
and cash equivalents (3,948) 1,948
Cash and cash equivalents
at beginning of period 5,452 2,309
Cash and cash equivalents
at end of period $ 1,504 $ 4,257
======= =======
See notes to condensed consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED OCTOBER 31, 1994 AND 1993
(UNAUDITED)
A. These financial statements, except for the April 30, 1994
condensed balance sheet, have been prepared without audit in
compliance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements have
been condensed or omitted pursuant to such rules and regulations;
however, the Company believes that this information is fairly
presented. It is suggested that these condensed consolidated
financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended April 30,
1994 and its accompanying notes and Management's Discussion and
Analysis of Financial Condition and Results of Operations.
B. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments, consisting of only normal, recurring adjustments,
necessary to fairly present the financial results for the interim
periods presented.
C. The Company's financial results, particularly as it relates
to its domestic oil and gas operations, are influenced by
seasonal fluctuations. During the Company's third fiscal
quarter, there are historically more days of adverse weather
conditions and fewer hours of daylight than the other months of
the year. Consequently, flight hours are generally lower during
the winter than they are at other times of the year. This
produces a seasonal aspect to the Company's business and
typically results in reduced revenues from operations during
those months. Therefore, the results of operations for interim
periods are not necessarily indicative of the operating results
that may be expected for the full fiscal year.
D. Certain reclassifications have been made to the prior year's
financial statements in order to conform with the classifications
adopted for reporting in fiscal 1995.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a comparison of the second quarter and the
first six months of the fiscal year ending April 30, 1995 with
the comparable periods of the prior fiscal year.
The Company is engaged in providing helicopter transporta-
tion and related services. The predominant portion of its
revenue is derived from transporting offshore oil and gas produc
tion and drilling workers on a worldwide basis. The Company also
performs helicopter transportation services for a variety of
hospital and medical programs and aircraft maintenance to outside
parties.
RESULTS OF OPERATIONS
Second Quarter Fiscal 1995 to Fiscal 1994
Operating revenues decreased $2.9 million, or 6%, to $44.8
million in the second quarter of fiscal 1995 compared to $47.7
million in the prior year period. The overall decrease was
primarily the result of a 6% decrease in flight hours from 55,967
to 52,821. Declines in domestic oil and gas and maintenance
revenues were partially offset by increases in the Company's
aeromedical and international markets.
Domestic oil and gas revenues declined $3.4 million, or 10%
from $33.6 million to $30.2 million. The decrease was primarily
related to the loss of three contracts which represented $3.3
million in revenues in the second quarter of fiscal 1994.
Aeromedical revenues increased $0.7 million, or 12% to $6.4
million in fiscal 1995 from $5.7 million in the same period of
fiscal 1994. Aeromedical flight hours increased 8% to 3,420 as
compared to 3,172. The increase is due to the addition of five
new programs and eight new dedicated aircraft during the past 18
months. The Company was recently awarded two new contracts that
will commence operations in the current fiscal year.
International oil and gas revenues increased 22% to $4.5
million from $3.7 million. Flight hours in the Company's
international markets increased 14% from 4,555 to 5,184. The
addition of two new programs involving two helicopters and one
fixed wing aircraft resulted in the improved revenues.
Other revenues, including maintenance, declined $1 million
to $3.7 million from $4.7 million.
The Company's operating margin improved to 12% for the
current quarter from 7% in the prior year's quarter. The in
crease is a direct result of the Company's efforts to control
costs. Consistent with the decline in revenues and flight hours,
direct operating costs declined 11% or $4.9 million. The de
crease resulted primarily from a decline in spare parts and
repairs and maintenance of $2.8 million. Cost of sales fell $0.9
million related to the reduction in maintenance revenues.
Helicopter rent and insurance declined $0.7 million and $0.5
million, respectively.
Selling, general and administrative expenses increased $0.2
million primarily as a result of a non-recurring $0.2 million
increase in professional fees related to the reincorporation of
the Company from Delaware to Louisiana and the Company's efforts
to acquire certain assets of Rocky Mountain Helicopters.
Second quarter interest expense was constant at $0.7 million
as the effect of higher interest rates was offset by lower
outstanding borrowings.
First Six Months Fiscal 1995 to First Six Months Fiscal 1994
On a year-to-date basis, the Company's operating revenues
declined 7%, or $6.9 million, from $95.3 million in the prior
year period to $88.4 million. Overall flight hours decreased 7%
to 104,893 from 112,964. Revenues derived from the domestic oil
and gas market decreased 13% from $68.2 million to $59.2 million.
Aeromedical, international helicopter services and technical
services revenues increased a combined 8% from $27.1 million to
$29.2 million and represented 33% of total revenues compared to
28% for the prior year period.
Equipment disposals increased $0.6 million from $0.4 million
in the prior period to $1 million in the current period. The
increase is due to the sale of six aircraft in the current
period compared to three in the prior fiscal year.
The Company's operating margin improved to 11% compared to
9% for the prior period. Direct operating costs decreased 9%
from $86.7 million to $78.5 million. Direct operating costs
decreased primarily by $2.9 million in repairs, maintenance and
spare parts expense, salaries and benefits of $1.3 million, cost
of sales of $1.6 million, helicopter rent of $0.8 million, fuel
$0.5 million and helicopter insurance of $0.5 million. The
decreases were a result of decreased revenues and flight hours.
Selling, general, and administrative expenses increased $0.3
million from $4.8 million to $5.1 million. The 6% six month
period to period increase primarily resulted from the non-recur
ring $0.2 million increase in professional fees described above.
The $0.2 million increase in year-to-date interest expense
was a result of rising interest rates offset by a decrease in
average debt outstanding.
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of the quarter ended October 31, 1994 was
$26.4 million compared to $30.6 million at April 30, 1994, the
Company's fiscal year end. The Company had total long-term debt
of approximately $34.9 million and helicopter lease commitments
of approximately $61.3 million as of October 31, 1994. Stock
holders' equity rose $2.5 million to $77.8 million at October 31,
1994. The increase was generated entirely from operating profits
net of $0.1 million for dividends paid to shareholders during the
quarter ended October 31,1994.
Cash decreased $3.9 million during the six month period. Net
cash provided by operations was $6.2 million. Cash aggregating
$4.4 million was used in investing activities, primarily for the
purchase of aircraft, and $5.7 million was used to reduce long-
term debt and the payment of dividends.
Certain covenants contained in the Company's financing
agreement prohibit the Company from incurring debt above the
amount available, $14.8 million and $13.5 million at October 31,
1994, under its present revolving credit and term loan facili
ties, respectively. Other covenants included in the financing
agreement restrict the amount of dividends, capital expenditures,
and investments.
The Company believes its cash flow from operations in
conjunction with its credit capacity is sufficient to meet its
planned requirements for the forthcoming fiscal year.
RESULTS AT A GLANCE (Unaudited)
The following table provides a summary of critical operating
and financial statistics (thousands of dollars, except per share
amounts, financial ratios, flight hours and general statistics):
OPERATIONS
Six Months Ended October 31,
1994 1993
Operating revenues $ 88,398 $ 95,276
Expenses 85,079 92,847
Net earnings 2,616 1,724
Net earnings per share .48 .31
Annualized return on
shareholders' equity 6.8% 4.7%
Total flight hours 104,893 112,964
FINANCIAL SUMMARY October 31,1994 April 30,1994
Net working capital $ 26,403 $ 30,572
Net book value of
property and equipment 86,863 85,639
Long-term debt 26,694 31,849
GENERAL STATISTICS October 31,1994 April 30, 1994
Helicopters 251 266
Employees 1,650 1,697
Part II - OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
Pursuant to the reincorporation merger described more fully
under item 6(B), below, on October 26, 1994, the Company changed
its state of incorporation from Delaware to Louisiana by merging
with a Louisiana corporation organized for this purpose. Pursu
ant to the merger, each share of voting common stock, $.08 1/3
par value per share, of the Company outstanding prior to the
merger was converted into one share of voting common stock, $.10
par value per share, and each share of non-voting common stock,
$.08 1/3 par value per share, of the Company outstanding prior to
the merger was converted into one share of the non-voting common
stock, $.10 par value per share.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of the stockholders of the Company was
held on September 28, 1994, at which time the following matters
were submitted to a vote of stockholders:
(a) The election of the following to the Board of Directors:
Nominees For Withheld
Carroll W. Suggs 2,912,612 269
Leonard M. Horner 2,921,877 4
Robert E. Perdue 2,921,877 4
Robert G. Lambert 2,921,872 4
(b) A proposal to change the state of incorporation of the
Company from Delaware to Louisiana was approved by the
following vote: 2,364,728 for, 362,419 against, and
73,557 abstained.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Agreement of Merger dated as of August 25, 1994 between
Petroleum Helicopters, Inc., a Delaware corporation, and Petroleum
Helicopters, Inc., a Louisiana corporation.
3.1 (i) Articles of Incorporation of the Company.
(ii) By-laws of the Company.
10.3 Amended and Restated Loan Agreement originally dated as of
January 31, 1986 Amended and Restated in its entirety as of July 9,
1993 among Petroleum Helicopters, Inc., Whitney National Bank,
First National Bank of Commerce, NationsBank of Texas, N.A. as
agent (incorporated by reference to Exhibit No. 10.3 to PHI's
Report on Form 10-K dated April 30, 1993).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan adopted by PHI's Board effective
May 1, 1992 and approved by the stockholders of PHI on September
30, 1992 (incorporated by reference to Exhibit No. 10.8 to PHI's
Report on Form 10-K dated April 30, 1993).
10.9 Form of Stock Option Agreement for the Grant of Non-Quali
fied Stock Options under the Petroleum Helicopters, Inc. 1992 Non-
Qualified Stock Option and Stock Appreciation Rights Plan dated
June 2, 1993 between PHI and certain of its key employees (incorpo
rated by reference to Exhibit No. 10.9 to PHI's Report on Form 10-K
dated April 30, 1993).
10.10 Employment Agreement between PHI and John H. Untereker dated
June 15, 1992 (incorporated by reference to Exhibit No. 10.10 to
PHI's Report on Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John H. Untereker
dated April 12, 1993, but effective as of July 20, 1992 (incorpo
rated by reference to Exhibit No. 10.11 to PHI's Report on Form
10-K dated April 30, 1993).
27 Financial Data Schedule.
(b) Reports on Form 8-K:
On October 28, 1994, the Company filed a Form 8-K to report
that on October 26, 1994 the Company consummated its
reincorporation as a Louisiana corporation. The reincorporation
was approved by the Company's stockholders at its 1994 annual
meeting held on September 28, 1994 and is described in greater
detail in its Proxy Statement dated August 25, 1994. To effect the
reincorporation, Petroleum Helicopters, Inc. a Delaware corpora
tion, was merged into Petroleum Helicopters, Inc. a Louisiana
corporation organized for such purpose. The reincorporation merger
did not change the name, business or management of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Petroleum Helicopters, Inc.
December 2, 1994 By: Carroll W. Suggs /s/
Carroll W. Suggs
Chairman of the Board
& Chief Executive Officer
December 2, 1994 By: John H. Untereker /s/
John H. Untereker
Vice President and
Chief Financial Officer