VTOL - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the Bristow Group Fourth Quarter and Full Fiscal Year 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, Olivia, and good morning, everyone. fourth full Group’s earnings year Bristow call. to quarter fiscal and XXXX Welcome the our Chief today Executive joined phone I'm on with Whalen. Bradshaw; Senior Jennifer Officer, and President Vice Officer, President, Financial Chris Chief and

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

website. You may our access on our investor presentation

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

Chris Bradshaw

and call, Thank you, the to welcome Crystal, everyone.

company's deliver following transaction proceeds to and valued of the million million and combined closed we to year. work in in were mandatory a flexibility refinancing workplace the discussed of I improved last further to facility. transaction the that want of related performance world existing Bristow in X% sheet the note friction complete pleased financial and which of core we the for to to FYXXXX customers protecting safety of realized all call, our debt hard excellent industry-leading significant $XXX the by days. amount included always, safe, much thank accidents in refinancing Bristow merger the On $XXX structure most in in amortization continues incidents important We reason run in and impacted synergies increased highest and When of to Bristow's X% of XX% The and requirements XXXX. strategic possess potential the and day. and the our notes investor capital annualized elimination our on their during from around as safety, that We our former numerous want senior savings. least maturity And begin This cash U.S. I $XXX to XXXX. a Bristow for secured of and benefits recordable work importance with balance dedication As air team to will Bristow $XX to Mexico, target used credit significant the the reduction debt. every costs year-over-year reliable to efficient, February. offering and commend value the in of is progress continues rate us. million due transaction globe priority. our their from incident the service our our operational approximately strong this operational position. X%, a zero very profile, balance we Gulf I prepared members Era flexibility, around The applaud most a sheet is changes a company reduction in on well. rate zero cleaner despite of extended integration the June team lost everyone which million merger operational occurred the we include make a with our and of a remarks identified FYXXXX, this enhances distractions achieved repay at We integration

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

of more total a resulting the synergy of the one-year in efficient by the XX% over capture to anniversary cost company. structure for merger, projects the expect We

our to financial performance. now recent Turning

company's gas and in industry, addition results to a seasonality In oil the offshore the typical quarter reflect conditions in our current challenging business.

it challenging hours Jennifer? we're generate year a days. for demonstrating results. I due our flow and has fiscal industry review of resiliency now continued a As business more conditions, of in full approximately financial Despite combined to hand more inclement fewer for detailed free substantial represents model. period weather to the accounted to of the lowest will XX% cash the fourth of our companies activity further amount quarter the the over the of March quarter Historically, daylight CFO flight still adjusted a quarter EBITDA.

Jennifer Whalen

million factors Thank or you, begin catch to fourth of operations, for year Cougar, including incentive $X in recognition Cougar, million the gas our change Chris. decreased a due decrease million due were million. lower, from expenses were impact and foreign and of $XX primarily Bristow’s of resulting $XX.X in with a higher, $X accrual will adjusted to main three EBITDA expenses. from sequential compensation compensation. General in quarter utilization decrease a million due third of XXXX I personnel during which costs headcount $XX.X quarter. revenue EBITDA. million of to Operating comparison oil from decreased from dispositions quarter Revenues joint a items $XX the expenses to lower million $XX $X.X and administrative venture up and fiscal to million financial million $X.X exclude all special compared The with million primarily due decrease contributing incentive exchange, the to directly results. the asset $X quarter were reductions to

will to and $X.X debt I extinguishment In that. a related recognized in related respectively note adjustments reductions costs refinancing there and merger-related in of This primarily that the we $XX.X accounting were our from fair and million addition, of of to restructuring also non-cash loss was that occurred on February. to related value loss force. million

results. help year the prior prior To Bristow that transaction, were focus quarter forma merged Bristow Era year special legacy results. quarter year the reminder, $XX $XX I’ll in for and quarter net of the in asset legacy a June General of versus and the quarter the not Operating the the $XX results the if decreased only was operating include results to year does due current With Group dispositions from lower to the pro administrative Group with XXXX, close the currency legacy presented, by was lower expenses as results Inc. periods comparability Bristow due were to the As oil $X the current million and versus acquirer comparable million headcounts. quarter. pro reminder, impacted was on quarter lower, were forma adjusted compared the Era include in merger and that previous million due prior periods compensation EBITDA, Inc., prior results on of expenses the primarily activity XX, prior items accounting current $XX fact The foreign gas. for lower lower in and to $XX.X losses Revenues million to $X utilization in year million decreased costs. were primarily million million quarter in due and year

the prior addition, million versus In loss a current earnings $X of year results the in equity included $XXX,XXX year.

$XX in for The two the of generated of remarks. flow free The to the cash I’ll for to working payments. million approximately back CapEx June, net cash we flow free was free to flow free model cash average further Chris? time, the adjusted free adjusted this have generated At due have normalized cash merger of in call current higher the strong than timing for quarters $XXX the Since will capital. adjusted in business primarily we changes million quarter. million flow flow. continue believe $XX previous this Finally, last of turn that Chris is quarter, cash and

Chris Bradshaw

Jennifer. you, Thank

environment gas on macro activity beyond to and a shore oil currently as believe outlook creating have future a levels for We we positive prices. customer services. demand demand decline and continue depressed off positive the effects receipt. for global will activity, trends Inventory seasonal oil recover Looking our pandemic will oil

to required investment. and a including in equipment likely utilization As upstream following improve drilling a Essentially, orders result, about gap indicators for recover and will spending offshore be levels years address industry are spending trending increased additional rigs. supply all positive direction, offshore will a their

generate we goes see by and the work oil ball, spending have not followed But be to While substantial gas cash this that a as period we back open companies results. in drives middling questions. that, the of as to cycle, current let’s XXXX for benefit line maintain from activity will interim, improved are and multi-year quarters expectations growth multi-year a to beginning demonstrated Bristow next and financial believe current idle do positive we offshore beyond. the free in we’ll restraints XXXX. will few claim our quarter this Olivia? In results. flow continue With a growth our as in the will expect company amount equipment crystal

Operator

you. ahead. coming Please Thank is from Instructions] Our question James [Operator Evercore. first with West go

James West

than Chris, through first little financials. more a typical or the quarter, it I’m the again, the seasonal or then by of a we’re company missed our still about just first and combined company kind estimates bit, curious, same, this but fiscal working client quarter calendar

Chris Bradshaw

to due Certainly, a our lowest Sure. and days. March fewer increment hours in year is weather more activity given daylight quarter quarter the

the some accounting. really decline oil March would quarter. Of in is we seasonal which So expect always gas the in revenues, weakness and

actually other of consistent revenues sequential Our would would and of in that expect. say between were basis. were oil XX% service gas, down we amount, third that on But that a quarter a basis, about that on with lines we would an positive patterns a – and half aggregate typical be seasonality

prior venture revenue And declines in be period in that, just about a of activity full the periods. third the joint Jennifer a decline would some as Cougar, accounts at for were change balance about the well. in witnessed recognition Canada that, to sequential that addition In that of more spoke impact

James West

Okay.

however is And the – of offshore I into and balance up year, like Okay. more should you revenue, you or to Fair looks improvements. of improvement about next or out the year alluded year. we see, about obviously, the magnitude it XXXX then about as and cyclical hours of more right we and to as activity, want think flight this enough. we going into into would What how to multi-year. How look in be better you next mean, types calendar it the describe recovery, think

Chris Bradshaw

Yes.

be seeing recovery, to just some expect where we But to to the there are In we months. basin, over just of want are question, as as globally. global forward back expect that declines could maybe the that including broad-base even broader move forward I isolated out Looking today XXXX. XXXX, forward projects there is in that base, supporting well Guyana, to our XXXX, getting are best are a today. recovery, stronger before new exploration where Suriname point reference in And Mexico, coming seen U.S. we drilling last the in again, more Gulf we’ve way more the that do projects moving we that a XX some of those projects XXXX,

is So before was it look the if in we the our activity activity support there, down from about pandemic. that Nigeria we where year-over-year example, Nigeria, customer at for XX%

that expect all market or next from the we of benefit Now I there’s in when will happen. that and know, year one recovery, don’t significantly back that it come will recover does year, but Bristow

So world. that of areas frame, business in the magnitude we’ve maybe the order decline some of seen certain around

James West

Okay. very I opportunities. here. I about think see in one additional search awards next more as pre-pandemic in a about lot was kind or Chris, there your How office to Maybe years? couple you back of as we helpful. of get outsourcing look firming has normal was and the those to rescue and squeeze wins of part be to at there we and that we That’s additional should business. bid, that know expect

Chris Bradshaw

Yes.

and nice our search as rescue believe very government be well We customers. to support We there Bristow growth the will a continue positioned a business. that to opportunity leader global for remains in expect

which represents timeline, In the UKSARXG that a and Bristow should terms experience due there the the we of the the very likely Award the contract do existing updates end time, winner proposals that that like Antilles for SAR good we of presence some is know opportunities where calendar now material support, summer. give we But we important summer. it’s then the SAR some of to for Contract again, end in known the at variability, the this is which to are believe of supporting Netherlands the won’t Dutch of the our will be be depending by UKSARXG, until opportunities timing, of at XXXX. no winner market. subject contract initial this obviously between The Caribbean, leverage think Dutch the to other end and upon in that In contract

Operator

to go Private a Investor. go [Adam we Next ahead. Please will Ritzer],

Unidentified Analyst

to forward. was charges, because I my of seemed the of in of guys, taking had QX, expenses, – et for there this end questions is, the call. going Hey things of I costs, one cleaner little noise it’s it if thanks expect the get a lot just year, cetera. like a you Is terms

Chris Bradshaw

Hey, Adam. morning, good

Some others. refinancing related is and of some its related to the and of the merger, it transaction to

will merger, once to were anniversary forward, think I of on, that going as year of just we’ve that question, of a that March items million. the past related these merger much Jennifer do one particularly your some transaction the period we well just the completed to In reported non-recurring be we costs get costs large had think refinancing additional we one-time wider. then extinguishment the debt charge And that to during related spoke we $X as restructuring $XX.X of related the the million about to a quarter. about there

non-recurring items there. So those were much very one-time

Unidentified Analyst

Is or hidden guess costs you the look you your I your know you that really next but if much the is, do down expenses, because there. synergies, going savings year-over-year, that’s don’t year? so I the coming an start sequentially, you think other of about Okay. somewhere to thing see far improvement talked of at G&A over

Chris Bradshaw

are we XX% it we about of basis comparing on a the in year-over-year G&A G&A. of basis, of FYXXXX, pro forma a year-over-year. portion we’re significant down at synergies QX to today, realizing expenses look pro QX corporate forma and So from a on If FYXXXX

we of only seeing making the we of portion out progress increase. as projects you and that costs of are get significant good we our cost that well. expect as of are a have will So remainder structure that synergy through amount towards the coming And

Unidentified Analyst

a I I’m know. refi it something What looked flat I ton at the way, assets versus $XXX wrong generating guys the XXXX, don’t that of sales, of Okay. $XXX free But million. ton aggressive know cash is more wasn’t have a cash, I the you’re on guess, the excess being plus me now buyback? maybe you Because about not done. that’s that million versus buyback XXXX to looking

Chris Bradshaw

the clean We and with March So part allocation, really future, great presented which opportunity our we did. the up us refinancing, a the balance gross million debt which $XXX the as our capital cash of in balance for terms of to sheet position quarter sheet the of significantly. deployed reduced

we think needs position capital cash So given those the allocated we’re quarter. that now, a March in balance and the we to in great sheet the

to opportunities long-term protection will shareholders, us capital and we be consideration be with still your could the of return certainly, were for with an important forward, balance that well. opportunistic very return capital be pleased we including allocation. opportunities some to attractive good value towards continued M&A again, Going there think creation some consideration And balance an able of cash for the company. we to quarter. consolidation with and the forward, are through sheet an March look also of sheet that at do question repurchases alternative capital putting is going share important But there as Along eye on in opportunities work and the for to do and what alternative will shareholders to that

Unidentified Analyst

Okay.

in less competition the of any have terms M&A, guys bidding of differences sale to with CHC? Babcock yet seen terms In you or

Chris Bradshaw

industry I individual that will though our years. specific overall. last from the about, too a heard from operators, would in that existed excess comments of the consolidation industry consolidation several spoken and for the So equipment, the because much view note is us around we’ve and realize positive you’ve too capacity over benefits of The terms situations, in many has no that

participate And in for industry. additional consolidation broadly so we Bristow opportunities that, the good. expect more is We there in that. will Hopefully, be also think can but

Unidentified Analyst

leader, progress or in that down sale there not Brazil. out left closing any seems it guess, guys many like, on the There’s I Okay. is leader

Chris Bradshaw

situation. material No on that updates

Unidentified Analyst

you Did taxes year, last looked about was I year? and payer $XX tax question. XXXX it? for you Okay. about it last cash like a be cash to be you’ll pay what would know about and think become million what you And that one taxes? expected CapEx then cash Do last

Jennifer Whalen

Jennifer. Adam. It’s Hi,

between, million CapEx around I And the primarily had that, million still our and same, On perspective, merger reasonable million to think then us. I aircraft, somewhere $XX all the and million in CapEx million. jurisdictions, that’s $XX to be $XX a sell front, is we we expected have, we did cash million a in That we and tax from S-X et think, $XX it’s expectation. $XX If that the there, will but still it as in reasonable more not U.S. range is upon change today, a to stands conditioned in in cetera, other that expectation. document $XX

Operator

with will Please we Clayton. to go Stankowski ahead. Jason Next go

Jason Stankowski

look in taking of kind business were see as has year of between When say year Do you that environment last being for call. where next merger – this is just searching you I it such the XXXX the at the just you curious. at less months sort hit to environment, whether a this healthy year now before is timeframe on it of Thanks bottom right trying time of and the we or guys. kind the today. this the Hi still the is we’re of understand nine for XXXX. calendar flat, know in kind you basis going last think of sort or – year-over-year but worsened XX improve, to

Chris Bradshaw

better have for Certainly regions impact gas even on lower is our more hard that earlier and a much our in do And create expect an that We not Norway, our impact. activity a results. levels markets full in recovery demand. the of stability witnessed on is activity market varied the the that really than to year-over-year frontier seeing to oil And that upstream quarter, Nigeria down impacts seasonality And financial that year and declines that particularly business some be now with resulting multi-year different to along varied overall and the such area you’re begins seen recovery global fairly in some earnest from our from industry the we the growth yes, basis. period in any flat growth levels as through in and overall we’ve in referenced have periods, business has are activity basin, of we March and will consistent, level we’re quarter. significantly in XX% parts Suriname services I spinning next the In our pandemic of occurred seeing pre-pandemic. example, but Guyana, the that, oil really business, declined hit than will has decline in it’s the another been as well. our at like of we’ll in certainly government of there that the market. direct line oil related businesses we’ve on seeing and services our been businesses of impacts or which of expecting that other contrast what the in impact about, see the impact right earlier flow some with including that, But March spoken business that period we always again, typical gas

Jason Stankowski

to in That’s a side, companies looks of you of there projects toehold guess those Can of the a sort can industry buy you And in to bolt-on sense helpful. only the in that of I fact future characterize M&A really nice could kind the Okay. players us it? it of to you there’s there’s would space can’t dozens that of with particular a and the of are wind give looking be a in few for set sort you multitude the build you of weeds you whether either can business you alluded us make if give like. for globally, to opportunity think it’d what at? awards. or I a on acquisition regard And you’ve kind that – be

Chris Bradshaw

regions offshore very question with which the the projects growth on There coming. think opportunity In wind much – be a they’re a world. appreciate secular market is no today, long-term but will nascent various United do I we the different industry stages supporting for in industry in States, offshore are of it’s the us. Yes. wind, helicopter that development around

in approval in In U.S. to fact, first a move Vineyard wind received the just scale Wind farm a forward. commercial final the offshore recent days,

milestone we’re for that So of about industry. development excited the

likely organically. So would in it’s it U.S., the ourselves we that do

all have offshore difficult operating that We the experience environments. in we need

farms. and from phase relevant of and thousands those of hours also around our We business thousands experience in world rescue waste of be maintenance the offshore the have that’ll offshore search wind

question, today Now have market smaller is market, about we expected, of Europe, we existing there, a to – – mature that is offshore with to of in at although alone growth go wind, think high will we many alone which companies. some potential I rates gets your which the a heart Jason, the more a or acquisition whether it look which still go when decision buyer want build think for that make to are of players, of

In players, part magnitude accurately the companies as evaluate most would a of as of there of would terms of describe potential that handful it probably I of number we that analysis.

Jason Stankowski

That’s Okay. helpful.

with other guys’ but Okay. I follow-up your have queue I’ll in appreciate later, any time. the things

Chris Bradshaw

Thank you.

Operator

Our go next coming with question ahead. Brian is Empyrean. Joseph from Please

Brian Joseph

the questions return, how balance do with just about guys, the the sheet – operate fortification, business? on pro forma the the much need you to how comment and cash actually on the sheet, balance Hey much capital

Chris Bradshaw

other big chunk for We management be the the allocation adequate $XXX work have at cash use think million support global cash to would will of that cash refinancing $XXX cash our anywhere continue the We alternatives sheet the we terms March in capital more that put operations, to the needs. we million for to to day-to-day look in a balance obviously do of have. in of available on today. that But $XXX million on We transaction.

Brian Joseph

it. Got

if deal up, going, are with Okay. And the here. merger satisfied another came given just would consummated far I you to want confirm how how you so is

Chris Bradshaw

in we’re should on they M&A present to opportunities a position capitalize think We themselves.

on the Era it’s are the on on great if to we We’re right additional merger. terms. move integration M&A of the positioned And Bristow progress be and can completed making there forward it

Operator

Pinnacle. Please question comes from with John next ahead. go Our Deysher

John Deysher

questions. for my taking Good morning. Thanks

to have to construction does service is any have? wind fleet able farm? portion already same be Or it reconfigured of side, offshore of wind an that the to the fleet be you the On

Chris Bradshaw

John. the are for wind two farm really separate support offshore good There Hey, helicopters. morning, phases of

The very gas, first part crew that construction business. similar our and phase. we’re offshore construction stage, really is to And of development business transportation the the that crews moving and and the in in oil is

aircraft light would to they producing latest of use farm. configurations those the the phase requirement that variants existing as HXXX so online phase the the hoist top existing required and AWXXX down that we complete its of of that Once support are farm twin the more served the and really So a and helicopters best the electricity there aircraft, and work. the maintenance of to to cycle, wind the life the transitions specifically and to pistols wind it’s is can operations missions namely maintenance the complete into is technicians different type of

wind And additions forward. likely new so to that that fleet part of our farm require the going support would

John Deysher

with current to got mean, service it build building first construction the of you can it I the But fleet. and element you Okay.

Chris Bradshaw

correct. That’s

John Deysher

Okay, good.

the XX how is should there’s what based. know of backlog your contract On outside investors cycle, growth – be at as no business we to XX% that’s see materializing, I disclosed. think looking I XXXX multi-year

indication happen be is So actually the that what’s is what going going happening. say you to to

Chris Bradshaw

revenues. ultimately drives Well, base what our oil customer our is upstream spending gas by and

at looking offshore and will gas budgets the So for oil companies plans and be spending the important.

Other drilling exploration customers. best going would as for really are place ultimately the offshore subsea like orders they the orders of spending indicator But projects. example. that rigs include be to offshore things for is our back of Some work indicators indicators will on revenues equipment for trees, the upstream by that

John Deysher

not now decreasing, it’s right increasing correct? stable, And or that’s Okay.

Chris Bradshaw

XXXX expected estimates, an the pointing are with spending be in that levels Correct. really The all third-party stable beginning in with to themselves ones to familiar most we’re roughly increase XXXX.

John Deysher

helpful. That’s Thanks. Okay.

the Just financial at much a this questions. left program of on the How point? share buyback is couple

Chris Bradshaw

a program. million we of through a that currently under the $XX Board approved XX, March The fall the million remaining $XX used approved million, amount so $XX had there’s in program

John Deysher

on there And was quarterly discussion run Good. side? what’s the rates SG&A, should we Okay. basis the of on reasonable or a use SG&A that yearly a

Jennifer Whalen

and still synergy mean on completed. Thanks, John. But XX% the guidance, through, don’t than directionally we is necessarily it’s as noise we quarters today. of of something it a it Where bit This give likely next quarter stable we just less something of is that there’s going few the what Jennifer. in should less synergies. the get run I but out than the quite we as through But

John Deysher

Significantly less, I mean in QX, magnitude in $XX it’s terms decline? of you $XX we were now million in and Should million us million. QX, help $XX.X use of at

Jennifer Whalen

look in special rate has to of items get some so as it. to to special SG&A, that have Well, you well. the what run When at items out you is sort strip the

not like after or be to I be unsubstantial, So that the not half I going not decrease the if it’s anything. it but mean mean – says you out strip and will special items

it don’t know what for on today less special So the adjusted is be. items than will would I basis. somewhere, it percentage But be a

Operator

conference Thank you. back I this time, any That question-and-answer you Mr. at for remarks. final session. today’s the Bradshaw, concludes will turn to

Chris Bradshaw

and questions safe the Have call. and well. and stay Olivia. the forward today our call look Appreciate joining We discussions. everyone, Hope good to Thank for on conference a you, next day. everyone connecting

Operator

you for This concludes participation. today’s conference. Thank all your

You may now disconnect.

Bristow (VTOL) 28 May 212021 Q4 Earnings call transcript