VTOL - Earnings call transcript Q3 2021

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Operator

Good day and welcome to the Bristow Group Fiscal Q3 2021 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Crystal Gordon, Senior Vice President and General Counsel. Please go ahead.

Crystal Gordon

Thank you, Jordan and good morning everyone. third year Group's earnings Bristow to quarter XXXX fiscal call. Welcome Financial with on and and Chief the joined our Senior Jennifer phone President, Bradshaw; I'm Chris today President Whalen. Officer, Chief Vice Officer, Executive

remind our that subject described investor statements in presentation. me make that on detail and are everyone management to call Let may the slide forward-looking more uncertainties risks are during three of

access You presentation investor website. our may our on

reconciliation reference certain release free non-GAAP financial such as is such GAAP and A presentation. and I'll earnings also measures cash now call EBITDA included flow. and President turn will our CEO. of investor the to measures the We in to Chris? over our

Chris Bradshaw

and Thank the welcome everyone. call to you, Crystal

safety highest and Bristow's world and place our which core every value I all priority. and for operational the important their is focus us. dedication potential distractions remarks always, As begin on our most our will want team in members around of prepared day commend numerous to to I Bristow despite thank the first note with safety a

far achieved thus zero all safety to our safely. home that our of employees XXXX to and FY the return air customers target standards ensure remain accidents highest of have achieving and We committed in

our are performance. revenues and quarter, financial adjusted pleased We also which with EBITDA this results demonstrated resilient

Era continued make June common of the and quarter company continues the liquidity The our With stock. progress strong possesses significant and of free repurchased XXXX. we Bristow of industry-leading integration following balance generation, shares total Bristow During repaid $XXX flexibility. XXX,XXX $XX and million cash debt to in merger over financial sheet million flow of positive

savings, of rate identified million the at synergies increased the least original cost $XX amount annualized million is to than higher We $XX total. of run which have

representing Projects of been already completed. XXst, savings million As of annualized have Synergy $XX January

not the synergy of a company. the efficient cost the the issued the business merger, over for to Bristow's to federal projects of to structure from more in impact take brief Bristow note servicing a to drilling exploration total that which three to expect waters. evidences a We in we activities. Gulf material resulting rigs capture with and moment limited Mexico, by oil expect do I XX% just order want one-year anniversary of exposure is and executive leases US the currently cause in To recently our gas begin drilling that new

rest activity Gulf will leases. With the suspension for the activities. other the Furthermore, of it is is the Jennifer? on and the few fact CFO new not executive in turn been of issuance drilling helicopters by work applies the in drilling more production exception office. the a announced in the I that now permits helicopter Gulf of supporting order This US underscored new a our Biden fleet those rigs, review have Mexico our President took supporting existing leases of of XX results. detailed to over financial since Mexico issued of to

Jennifer Whalen

and asset begin second EBITDA comparison foreign was the XXXX expenses items services severance oil gains lower part due fiscal were lower million in to costs decrease revenues Revenues of in in due sales to increased quarter million higher quarter. to and or previous expenses of was were $XX to fees. gas a helicopters regions. lower related those $X.X quarter due sold dispositions million. Bristow's of will costs. quarter quarter I $X This and a and $X.X financial Chris. partially the to General offset increased higher professional to recognized million due $X.X exclude million, by in third primarily currency results. the due maintenance you, utilization prior Operating to administrative Thank decrease to $XX adjusted the million with for special compared sequential year primarily

item In impairment in which is the investment a of addition, during Vancouver quarter adjusted special to million $XX EBITDA. related considered in Canada, there not was and an charge the

focus the As Bristow that not include the quarter. reminder, comparable the and due Revenues utilization Group million, decreased the lower, due quarter. dispositions in $XX and a lower XX. periods reminder, pro to the items current was compared the prior the To was of will presented, professional million comparability quarter General year were pro help year lower gains results Operating Era Prior move decrease I acquirer in legacy legacy services accounting the include as periods on current special adjusted EBITDA of forma prior special the Group items Bristow the versus currency were in close in year year year fixed-wing transaction, of lower activities. legacy The to decreased forma the to million EBITDA And $XX versus quarter, adjusted the primarily the due to year administrative quarter $XX is pro discussion. with higher and and quarter million. was in previous and current $XX on merged the gas of on the results foreign fact prior EBITDA asset Inc. year in for to were if With Era and the that quarter million oil primary Inc. merger for the June expenses I does primarily $XX results driver fees. operating forma from compensation only services. in to forma due quarter Bristow costs pro will expenses for prior

The the was of the timing previous quarter, excluding than net $XX normalizing the for in cash adjusted of capital working we to flow CapEx due The for two payments. quarters payments. of approximately current net primarily timing changes free $XX flow in average generated due to Finally, free lower excluding cash cash flow is of million the quarter. adjusted free CapEx million

remarks. At this addition, time, I'll Chris? quarter. net further the million sale in In to we back $XX call during from of turn the generated the Chris for proceeds helicopters

Chris Bradshaw

Thank you Jennifer.

is resulting services business government the Bristow and in cash contracts merger, different recent that with and combined is countries. an located diversified our more flow enjoy than and more XX production from gas benefit two oil a periods We clearly aircraft XX% company to $XX larger our Following company, full run of savings. weighted additional the we future performance of rate from will activities. quarters merger. to financial And the demonstrate combined the synergy support The last up benefits capture, ramp as million stability

positive to a cash continue shareholders. opportunistically disciplined returning for questions. will we execute forward, let's line protecting that, the balance to approach flow, sheet Jordan? on open the focused Going generating capital and capital With

Operator

Adam our ahead. And Please from first Instructions] it go look Ritzer does [Operator [ph]. we Absolutely. like have question

Unidentified Analyst

Thanks taking question. for morning. Good my Hi.

Chris Bradshaw

Adam. morning, Good

Unidentified Analyst

said, don't I'm the I you I want going on Could how in effect what's more give leasing. Mexico, guess, granting little whole any they don't really starting there? -- still off a more on down lease of the they maybe permits basically detail are Gulf

Chris Bradshaw

Sure.

has time. and periodically awarded the a difference it. is permit well place the performing take be oil rights lease and to. gas the lease A that the the seabed auctions in the a between a is over would permit on is that activity water company Those the and specific lease to underneath a So that right company that that to are of plot and

are that XX and have office for them took leases. been President permits since issued, again, existing of have Biden issued, the those So, been

the new to suspension effectively issuance of So, seabed. current does on underlying work or of the water pause, new is the leases rights plots what and

Unidentified Analyst

Got it.

trend. seems years? Okay. you now? active there new I copters question have maybe being five Guyana, for every new It companies on that next, over guys wells down Can three A potentially Thanks drilled, day that in look explanation. the Suriname. about like there's many talk what know, how might like And almost don't the to being you

Chris Bradshaw

Sure.

one and has remains been the spots bright certainly of triangle a for us bright us Caribbean globally. the So spot for

that gas today for waters a expect First grow. in of which operator had We grown two XX thus sole across the in challenges over That servicing It's and servicing market customer few leading the such had market last And last countries presence prolific the reserves Guyana exploration offshore Suriname on who has helicopter have XX Trinidad, a than the and has during despite customers fairly helicopters where the far. in the finding in is variety downturn. oil we've a of and oil companies currently months overall continue success and to mentioned, we have currently more projects. and handful stable Bristow then, of Guyana the in support in now the to it you gas those their industry. will now, been growing where the broader the Suriname, years

highest but globally growth by I quoting region In terms or targeting that this a be perhaps offshore will see. a the certain we're number, and specified a oil not think we do date, gas specific rate aircraft count of

Unidentified Analyst

they you sure the potential Air listen guys & the in Sea Okay, wind. to Analytics which recent discussed I'm great. for call,

I growth? potential you the think your you there might be plans they XX anything over going said XXX aircraft participate essentially that to the there's years. have or next what about talk Can on in over wind

Chris Bradshaw

Yes.

in optimistic and it's over close one we It's Europe think offshore that that experience, U.S., farms today are several the boats, farm one exposure so grow be those to grow the developed to are much expected one model. the important helicopter to scheduled invested a regions. U.S., with here at support. We in wind wind that significantly to but but continue the any projects by and offshore new expected wind heels part Today about are the We it's because scheduled the next we shore that. in but have We Bristow our The nascent in given when the experience going very billions energy of is that will require the operating that, offshore think rapidly of do more of supported and operating on that's do is dollars not already that which again extensive market for believe global maintenance thousands market of hours positioned have is fairly phase we thousands years. hoist mature farm. into transition a wind importantly, very be incredibly the to and the important well to And you of that's and be conditions. an multiple operating with get to is difficult in Bristow, Asia,

the some in there. to we'll positioned that So growth market U.S., but opportunities Europe, take see to going we and growing priority be for a penetrate much advantage we is of a In strategic well there. the we're very post-merger, market of be think this Bristow nascent, that

ourselves. some that. we're to given more think do near-term so, will the in now that nature available position will work there of We Europe, working be potentially well-established And be already

for a one but today, in market. definitely exposure and strategic we're potential no opportunistic new So, the that priority the about, that company

Unidentified Analyst

can that additional now some fleet the of CapEx? in things copters service have you would or mentioned, require those that Do Great. you

Chris Bradshaw

it's phase, phases those The development So, two to in most life much offshore the support today. wind and are have are the the really crews configuration. from important offshore helicopters really change competitive the work and model to the construction an the transporting which of used farm. At that beginning an to and what AWXXX in crew facilities we are be fleet very the construction would cycle

as know our the operator life and So today. farm operations phase is cycle. transition of the the the the wheelhouse, you of world definitely and O&M phase XXXs or field in operational, maintenance After largest you wind we're into the within

that [ph] to to of twin hoisting stool likely the be work, or either that the would scheduled unscheduled And required mission most do the they're that helicopters. down of maintenance. light model maintenance the helicopter models for technicians profile the For work pit variants is the top new for

popular the to be those variants successful in would that, new for most And into today. would fleet. need that attractiveness are either we winning of justify But if CapEx, AWXXXs and returns we that the bring that or HXXX new to those some in are capital go and we think the So would our the spend industry the work.

Unidentified Analyst

statement? I'd number be of would years purchasing that new contracts, a you Got of it. wouldn't without any assume those no a for fair be new And copters

Chris Bradshaw

with disciplined remain our will capital. We

referenced, type We're to have allocation. approach. is to look they build deploy this for disciplined believe come uses because be we think and we attractive capital will other as capital not we I you it a with going do how

Unidentified Analyst

Bristow wrote lost said bankruptcy? Got all customer. happened instead a of in the Cougar? the quick looked sudden Q-look it. guys significant it you of why that you with What down a Is it I during

Chris Bradshaw

Jennifer, do Cougar? about you want to talk

Jennifer Whalen

Yes. to Adam, good you. talk to

than that in to our led of also consolidation deteriorated previous was notably continue temporarily quite determine market temporary $XXX other an the we've As do impaired. impair to market wrote equity the facilities of the impairment. and monitor investments impairment into the there, going us operations led the up the of customers lease million we charge filings, disclosed were quarter. about There quarter and But Cougar which that expect events do to to lots this investment than aircraft forward. just our their a other Cougar the But and during the who for We has during up bit to so investment. us there support most

Unidentified Analyst

any it. Got Okay. on update up? on leader getting with is And sold and what's negotiations there on that the going finished

Chris Bradshaw

No, there, update Adam.

and leader. We have exited shareholder our position

through there there. recoup update no material to our money working procedural former process are interest, We the for but

Unidentified Analyst

everything. for be noticed reviewing any color EMS on anything next PHI chapter you us on -- the rumors said What that a going CHC they Babcock new is there builds. XX. or Okay. Can that gain? on consolidation comments consolidation is There's the perhaps just I hired banker phase? of going their might give in

Chris Bradshaw

a capacity, similar creating strong perspective, value our specific Well, say comment another the costs, underpin see A of of has consolidating needs logic And synergies there. if on the the to would additional I other the from of potential operators. we we -- that From would and from any financial But we I sheet lot if world overlapping by the different of we and positive market our to we but can't benefits believe would rationale apply from would of eliminating industry combinations parts consolidation. of benefit too there's would the benefit a be continue some consolidation. that transaction in balance where And interest there fit within believe as that continue well. any excess cash interested opportunity need strategic our situation, the an many merger would that M&A that. Bristow of market profile. to free Era too parameters is priorities And much flow in maintaining equipment, in amount

to So in as been be we disciplined we've past, to consolidations. approach any -- going we're the in

Unidentified Analyst

sorry Great. Okay. Thank you. I’ll in Thanks. jump many to I’m back a questions, line. ask so

Chris Bradshaw

Adam. you, Thank Okay.

Operator

take [Operator Jason Please go Instructions] with ahead. And next from Clayton. Stan our we'll question

Jason Stan

you morning? this are How guys. Hi,

Chris Bradshaw

Hi, good morning.

Jason Stan

Cougar? are of kind Can customers get regard here, a on forced was Just you elaborate little of bottoming that the or just still with are trying trying the to to a kind guess I we you cycle sense Just bit leaving customer more have and of we one and to it to the find write-off? pricing bottom?

Jennifer Whalen

a that is we impairment sure, Well, East consolidation specific in are is impairment market of not market did Canada, to significant predict there there and same Cougar, other customer strings sort we time, did which but at consolidated, a that, can have I'm been bottoms that of an doing the we challenged. market. which the couple that customers has that where the

Chris Bradshaw

revenues. to globally our in that I resiliency seen that, with would that add we And think the Yeah. are we've pleased I

of couple actually modest amount you sequentially. we a up last were quarters, that the Over can see

broad-based okay, significant a Canada market are not still we activity think calendar are Bristow that's off with And are. any And even of stabilizing generate this global beyond they we're because substantial where in lower signs year flow the amount oil XXXX. of recovery prices free a cash will what So basis, of just seeing expecting market obviously but levels, on I stabilizing.

the be upside beyond, positioned a As gas benefit get we're does offshore we more that what constructive market recovery need and when much into growing very market are come. significantly to oil about we XXXX and a from and will for

Jason Stan

about look how that that kind a there NAV? Bristow XX net we If net a NAV goals book forward off should appropriate earn of expectation that guys helpful. should on – you returns for I of to margin, for capital? your be That's at is and the think or thinking about interesting and Is on comping JTX be we of net or Okay. NAV slide And value. put which is you margin going the you slide the the

Chris Bradshaw

Sure.

industry don't threshold that, targeting competitive really a haven't I specific earn we it. for and that whole note the discuss externally So disclosed return as reasons. struggled would a we're to has

Jason Stan

return. Any

Chris Bradshaw

We've free Get to now. merger. Yeah. a cost done to flow in in we cash in couple have you're we're going a as what returns doing earn from be to we're crusher as case our Yeah. real can a think quarters on generating which opportunity think to the it of really positive I efficient the very continue focused generating last pull-through substantial of cash that, clearly as But what even is be And depressed company. way over Bristow environment. an attractive now we all and synergies the seeing the flow,

Jason Stan

I And Are debt? your And lastly, when to you was And can stock what to then surprised I you higher are – the allocation? I little on your debt buybacks able earnings in relative you cash guess, should more guess our nothing. bit the buyback Okay. limitations back maybe capital talk between buy cost high-cost to to a buy ability back the quarter.

the are sense the urgency you have? and Just guys that thinking you there about balance of

Chris Bradshaw

Sure.

So review about at. we kind done I'll talk our we're and alternatives then also what first, of where and see looking allocation we've recently what capital

Xa think given the conditions should of protecting we broader market that challenging balance and a be oil in gas and So the visibility the limited sheet. in environment amount that this priority

of source capital the about strategic call to aircraft an then a to on opportunities opportunities sheet important new M&A We that of future. for CapEx is balance the that also allocation return believe a then not earlier an foreseeable to basis. that, is opportunistic strong in believe that, do advantage. capital beyond consolidation for to significant some near finally, And we And be for we'll spoke shareholders have we having expected the in

win might or opportunity search contract if the need a returns rescue if there, then offshore the new there, and a we an talked new for aircraft about caveat we have very earlier in focused do that we government However, call right. are wind

we've how share our $XX deal last debt alternatives. basis. September, to that's announced back with pay repurchase we've down, an Since we $XX since see share sheet of through million paid this merger past program repurchases shareholders a some bought we worth on downs. great At protecting same about been very of also targeted balance the both we returned time, stock. So Recently, June. the the closed the much capital We million opportunistic debt

strong sheet, both high continued our given of we free we repurchase So again, balance can generation flow think sheet the shares. visibility our and positive some that cash balance protect

given balance However, cash the in earlier large pointed the out, as will limited XA broader balance visibility sheet. market note, priority do the discussed On have that today. protecting be a I you've we

are evaluating options structure. our for We debt

aware have tightening attractive benefit would that there are of to conditions the in over been markets have we couple an And the some something We market do and out go months. if opportunity that last financial the terms maybe simplifying we're interested in company some on going be pursuing. accomplished something can of of be an sheet then that maturities attractive to in and that's think I extending the rate, all balance

So going that. monitoring we of try And we're something, we're to there. take actively to opportunities if our see advantage

Jason Stan

for like guess the high-cost piece? liquid Is it or on All just trade the And in the right. buy the debt is enough just Okay. side. market, I lastly open you really not to debt

Chris Bradshaw

And slight as buy -- some carry able those point, happy value fairly pleased because par. XX.X, those to they in. very face are million them think people We really your money just are at just I November back notes at are think of were discount X.XX% we're view good. traded. to holders in the But thinly the to to of bring so many to a bought We back it Yeah, thinly to $XX them notes traded. I back

Jason Stan

right. Thank Appreciate All you Right. much. so your time.

Chris Bradshaw

Thank you.

Operator

our take next John question we'll Please And Deysher Pinnacle. with ahead. from Okay. go

John Deysher

Good morning, everyone.

Chris Bradshaw

good John, morning. Hi,

John Deysher

offshore does been probably versus curious but just and of XXXX alluded your to gas XXXX oil I visibility have and versus think gas how oil look the the for is for was I set. offshore calendar I you morning. most your know market? Good this Chris, earlier, what XXXX? budgets customers And of XXXX

Chris Bradshaw

at and fiscal the reported September ended look most quarters two we our quarters, December If recently QX QX and respectively.

what seems is stabilized. the were modest a think consistent a have Revenues John periods, bit the activity amount we've two to up that observed little sequentially. actually I between

in some we're stabilization market. So seeing the

another broad-based we on generate For again constructive okay calendar which XXXX, counting are of we're to of a we prices level spending flow around to Where today, know going start beyond. result cycle more It's to benefit we'll in projects here to business. increase things is be is our that any from be We should XXXX in in spending significant where to base above deepwater because because more the underinvestment commodity that customer dollars see really and higher year needs not this not we're there is and sustainable. world today's additional cash and substantial going our on go amount work regardless. think

John Deysher

do Okay. of percentage you And contracts you versus XX, December the XX rolling was impact as might any business? oil of the remind your and XX in spot? gas Great. anticipate business what next to that months off Can offshore contract us

Chris Bradshaw

new Jennifer we're available a want contracted. And from do the -- nothing Jennifer that mix but that there's on also comment expect of existing would on we terms let time, how versus that are coming retaining is we rolling to on the business. on contract contracts focused the you out winning up, not have have both there. time our opportunities I just to what's material of But much and but I'll to in off, comment are adhoc? work, obviously contract say approximate Jennifer opportunities

Jennifer Whalen

where we being large overall around have Gulf part couple Sure. Mexico especially I than number mean precise We places overall Mexico today. percentage spot revenue. of of of the that and low other the where a of more world others revenues It's percentages, a there's not have spots it's of a of some a some. Gulf of one I couple activity have those. don't spot -- our but markets do but

John Deysher

Okay.

business be XX% So the contract what overall offshore? or of XX% might

Jennifer Whalen

That's correct. directionally Yes.

John Deysher

would And materially rolling that Okay. forward? business off anything anticipate going impact don't you

Chris Bradshaw

Not that we're aware of today.

shorter-term some we're supporting. have We projects

that are and ending are that scheduled pick others -- may to others up. have be that We scheduled we have

there business some of kind the at time. minuses pluses year, looking any but So this will material be to impact not of at we're any and course throughout the

John Deysher

Great. Thanks Okay. and luck. good

Chris Bradshaw

Thank you.

Operator

appear further are the at no this phone lines there questions that would on time. it And

Chris Bradshaw

Thank Great. you quarter. and we Hopefully safe continues thank care. Jordan everyone everyone. and forward well look speaking next you and remain Take to again to

Operator

you And this call. does today's conclude for your Thank participation.

disconnect. now may You

Bristow (VTOL) 3 Feb 212021 Q3 Earnings call transcript