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News Release

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Bristow Group Reports Financial Results for Its 2011 First Fiscal Quarter Ended June 30, 2010

HOUSTON, Aug 04, 2010 /PRNewswire via COMTEX/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for its June 2010 quarter.

"We are pleased with our June 2010 quarter results, which were slightly better than our internal expectations and compared favorably with the June quarter last year," said William E. Chiles, President, Chief Executive Officer and Chief Financial Officer of Bristow Group. "Operating margins improved in all business units with the exception of our Other International business unit which was lower primarily due to delayed start up of new contracts in Brazil. We experienced only modest gains on the sale of a few aircraft; however, the aftermarket for used aircraft continues to show signs of improvement. Our gains on aircraft sales during the June 2010 quarter were $4.3 million lower than those during the same quarter last year. While these sales are a recurring part of our business, their timing can be unpredictable.

"Our North America business unit benefitted during the quarter from contracts with BP in the Gulf of Mexico, where 18 of our aircraft are supporting the well control and spill cleanup efforts. While we can't predict how long this work will continue, during this quarter the new work more than offset lost business from customers stalled by the deep-water moratorium."

JUNE 2010 QUARTER RESULTS

June 2010 quarter revenue totaled $292.2 million compared to $290.5 million in the June 2009 quarter.

Operating income in the June 2010 quarter was $39.7 million compared to $44.8 million in the June 2009 quarter.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") totaled $59.8 million in the June 2010 quarter compared to $61.7 million in the June 2009 quarter. EBITDA is a measure that has not been prepared in accordance with Accounting Principles Generally Accepted in the United States of America ("GAAP"). Please refer to disclosures contained at the end of this news release for additional information about EBITDA.

Net income totaled $20.8 million in the June 2010 quarter, or $0.57 per diluted share, compared to $23.7 million, or $0.66 per diluted share, in the June 2009 quarter.

"In addition to the activity with BP in the Gulf of Mexico, our June 2010 quarter results also benefitted from activity levels that remained robust in Australia and Nigeria," Chiles said.

"Australia continues to generate improving returns, as we see the benefits of a two-year management overhaul. Results in this business unit also benefitted from changes in foreign currency exchange rates.

"Near-term results in Nigeria may flatten commencing in the December 2010 quarter due to the non-renewal of a contract under which we operate six of a customer's aircraft. We expect the lost revenue of approximately $42 million per year to eventually be offset by new contract awards with other customers and increased ad hoc flying in this region.

"In Europe, overall activity levels declined in the June 2010 quarter, but they were in line with our expectations. With the startup of new contracts, we expect results from our Europe business unit to strengthen beginning in the September quarter. We are currently experiencing an increased level of tendering activity, which bodes well for the performance of this unit going forward.

"In our emerging market business unit, Other International, we were negatively impacted by our exit from Kazakhstan late last fiscal year and by weak results in Brazil caused mainly by higher costs associated with the startup of new aircraft contracts. We expect results from Brazil to be significantly stronger beginning in the September quarter.

"Most of our larger customers are primarily national and international oil companies, and with oil prices appearing to stabilize in the $70-90 per barrel range, we expect capital spending on both exploration and development to improve this year. Some large projects that were put on hold last year are being restarted, and we see additional opportunities in new and existing markets in the future.

"It is not possible to accurately predict demand for the remainder of the fiscal year in the Gulf of Mexico, given the political uncertainty over the deep water drilling moratorium. We expect our contract work with BP to decline when the spill cleanup effort begins to wind down. A small number of deepwater drilling rigs have already begun mobilization to other markets. However, we are well-positioned to respond to demand changes in this and other markets in the future.

"As previously disclosed, we expect revenue and earnings per share for the current fiscal year to be stronger than fiscal year 2010 as we put additional newer-technology aircraft to work for our customers and realize the benefit of cost efficiencies from our recently reorganized structure.

"We continue to expect a sequential improvement in our financial results for the second quarter of this fiscal year and we also anticipate a much stronger second half compared to the first half of fiscal year 2011," Chiles said.

CAPITAL AND LIQUIDITY

In the June 2010 quarter, net cash generated by operating activities was $25.7 million and net cash used in investing activities was $23.2 million. At June 30, 2010, we had:

  • $1.4 billion in stockholders' investment and $711.5 million of indebtedness,
  • $73.9 million in cash and a $100 million undrawn revolving credit facility, and
  • $81 million in aircraft purchase commitments for seven aircraft.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EDT (9:00 a.m. CDT) on Thursday, August 5, 2010, to review financial results for the 2011 first quarter. This release and the most recent investor slide presentation are available in the investor relations area of our web page at http://www.bristowgroup.com/. The conference call can be accessed as follows:

Via Webcast:

  • Visit Bristow Group's investor relations Web page at http://www.bristowgroup.com/
  • Live: Click on the link for "Bristow Group Fiscal 2011 First 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 1-877-941-9205
  • Replay: A telephone replay will be available through August 19, 2010 and may be accessed by calling toll free 1-800-406-7325, passcode: 4330736#

Via Telephone outside the U.S.:

  • Live: Dial 480-629-9866
  • Replay: A telephone replay will be available through August 19, 2010 and may be accessed by calling 303-590-3030, passcode: 4330736#

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is a leading provider of helicopter services to the worldwide offshore energy industry. Through its subsidiaries, affiliates and joint ventures, 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, Mexico, Russia and Trinidad. For more information, visit the Company's website at http://www.bristowgroup.com/.

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 the impact of activity levels, business performance, fiscal 2011 results, industry capital spending 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 June 30, 2010 and annual report on Form 10-K for the fiscal year ended March 31, 2010. 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.

    Linda McNeill
    Investor Relations
    (713) 267-7622


                  (financial tables follow)


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

                                                     Three Months Ended
                                                          June 30,
                                                          --------
                                                     2010         2009
                                                     ----         ----
    Gross revenue:
       Operating revenue from non-
        affiliates                               $254,594     $248,891
       Operating revenue from affiliates           17,415       14,602
       Reimbursable revenue from non-
        affiliates                                 20,063       25,853
       Reimbursable revenue from
        affiliates                                    166        1,106
                                                      ---        -----
                                                  292,238      290,452
                                                  -------      -------
    Operating expense:
       Direct cost                                183,164      180,677
       Reimbursable expense                        20,178       26,657
       Depreciation and amortization               19,331       18,186
       General and administrative                  30,902       28,802
                                                   ------       ------
                                                  253,575      254,322
                                                  -------      -------

    Gain on disposal of other assets                1,718        6,009
    Earnings from unconsolidated
     affiliates, net of losses                       (702)       2,633
                                                     ----        -----
       Operating income                            39,679       44,772

    Interest income                                   292          222
    Interest expense                              (11,038)     (10,012)
    Other income (expense), net                       515       (1,481)
                                                      ---       ------
       Income before provision for
        income taxes                               29,448       33,501
    Provision for income taxes                     (8,540)      (9,510)
                                                   ------       ------
       Net income                                  20,908       23,991
       Net income attributable to
        noncontrolling interests                     (100)        (268)
                                                     ----         ----
       Net income attributable to
        Bristow Group                              20,808       23,723
       Preferred stock dividends                        -       (3,162)
                                                      ---       ------
       Net income available to common
        stockholders                              $20,808      $20,561
                                                  =======      =======

    Earnings per common share:
       Basic                                        $0.58        $0.71
                                                    =====        =====
       Diluted                                      $0.57        $0.66
                                                    -----        -----

    Weighted average number of common
     shares outstanding:
       Basic                                       35,969       29,133
       Diluted                                     36,281       35,782

    EBITDA                                        $59,817      $61,699

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


                                                        June 30,    March 31,
                                                          2010        2010
                                                          ----        ----
                                                       (Unaudited)

                                        ASSETS
    Current assets:
      Cash and cash equivalents                          $73,858     $77,793
      Accounts receivable from non-affiliates            224,899     203,312
      Accounts receivable from affiliates                 18,533      16,955
      Inventories                                        186,223     186,863
      Prepaid expenses and other current assets           37,080      31,448
                                                          ------      ------
           Total current assets                          540,593     516,371
    Investment in unconsolidated affiliates              200,797     204,863
    Property and equipment - at cost:
      Land and buildings                                  86,091      86,826
      Aircraft and equipment                           2,032,803   2,036,962
                                                       ---------   ---------
                                                       2,118,894   2,123,788
      Less - Accumulated depreciation and
       amortization                                     (407,306)   (404,443)
                                                        --------    --------
                                                       1,711,588   1,719,345
    Goodwill                                              31,182      31,755
    Other assets                                          20,405      22,286
                                                          ------      ------
                                                      $2,504,565  $2,494,620
                                                      ==========  ==========

    LIABILITIES AND STOCKHOLDERS' INVESTMENT
    Current liabilities:
      Accounts payable                                   $46,424     $48,545
      Accrued wages, benefits and related taxes           29,160      35,835
      Income taxes payable                                     -       2,009
      Other accrued taxes                                  4,856       3,056
      Deferred revenues                                   16,055      19,321
      Accrued maintenance and repairs                     12,836      10,828
      Accrued interest                                     8,601       6,430
      Other accrued liabilities                           22,878      14,508
      Deferred taxes                                      10,126      10,217
      Short-term borrowings and current maturities
       of long-term debt                                  14,890      15,366
                                                          ------      ------
           Total current liabilities                     165,826     166,115
    Long-term debt, less current maturities              696,594     701,195
    Accrued pension liabilities                          104,076     106,573
    Other liabilities and deferred credits                19,852      20,842
    Deferred taxes                                       148,625     143,324

    Stockholders' investment:
      Common stock                                           362         359
      Additional paid-in capital                         680,190     677,397
      Retained earnings                                  840,953     820,145
      Accumulated other comprehensive loss              (158,089)   (148,102)
                                                        --------    --------
                                                       1,363,416   1,349,799
      Noncontrolling interests                             6,176       6,772
                                                           -----       -----
                                                       1,369,592   1,356,571
                                                       ---------   ---------
                                                      $2,504,565  $2,494,620
                                                      ==========  ==========

                       BRISTOW GROUP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)

                                                  Three Months Ended
                                                  ------------------
                                                      June  30,
                                                      ---------
                                                    2010      2009
                                                    ----       ----

    Cash flows from operating activities:
      Net income                                 $20,908     $23,991
    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation and amortization               19,331      18,186
      Deferred income taxes                        5,740       2,810
      Discount amortization on long-term debt        776         725
      Gain on disposal of assets                  (1,718)     (6,009)
      Gain on sale of joint ventures                (578)          -
      Stock-based compensation                     3,730       3,607
      Equity in earnings from unconsolidated
       affiliates less than dividends received       702       1,078
      Tax benefit related to stock-based
       compensation                                 (163)        (26)
    Increase (decrease) in cash resulting from
     changes in:
      Accounts receivable                        (20,451)      9,866
      Inventories                                   (944)     (6,336)
      Prepaid expenses and other assets              162      (7,958)
      Accounts payable                            (1,466)      6,081
      Accrued liabilities                          2,563     (13,127)
      Other liabilities and deferred credits      (2,942)      2,092
    Net cash provided by operating activities     25,650      34,980
    Cash flows from investing activities:
      Capital expenditures                       (29,508)    (86,040)
      Deposits on assets held for sale             1,000      23,764
      Proceeds from sale of joint ventures         1,291           -
      Proceeds from asset dispositions             4,022      40,364
      Acquisition, net of cash received                -    (178,638)
    Net cash used in investing activities        (23,195)   (200,550)
    Cash flows from financing activities:
      Proceeds from borrowings                     1,963           -
      Repayment of debt                           (6,767)     (1,404)
      Distribution to noncontrolling interest
       owners                                       (637)          -
      Partial prepayment of put/call obligation      (14)        (19)
      Preferred stock dividends paid                   -      (3,162)
      Issuance of common stock                       111         346
      Tax benefit related to stock-based
       compensation                                  163          26
                                                     ---         ---
    Net cash used in financing activities         (5,181)     (4,213)
    Effect of exchange rate changes on cash
     and cash equivalents                         (1,209)      7,109
                                                  ------       -----
    Net decrease in cash and cash equivalents     (3,935)   (162,674)
    Cash and cash equivalents at beginning of
     period                                       77,793     300,969
                                                  ------     -------
    Cash and cash equivalents at end of period   $73,858    $138,295
                                                 =======    ========

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

                                              Three Months Ended
                                                   June 30,
                                                   --------
                                               2010         2009
                                               ----         ----
    Flight hours (excludes Bristow
     Academy and
       unconsolidated affiliates):
         North America                        21,404      22,117
         Europe                               12,967      14,855
         West Africa                           9,760       8,950
         Australia                            3,240        2,880
         Other International                 11,478       11,125
                                             ------       ------
          Consolidated total                 58,849       59,927
                                             ======       ======


    Gross revenue:
         North America                      $52,811      $49,856
         Europe                             101,691      115,065
         West Africa                         59,096       54,817
         Australia                           35,291       28,163
         Other International                 32,819       32,994
         Corporate and other                 10,842       11,816
         Intrasegment eliminations             (312)      (2,259)
                                               ----       ------
          Consolidated total               $292,238     $290,452
                                           ========     ========


    Operating income (loss):
         North America                       $5,308       $4,426
         Europe                              18,299       19,778
         West Africa                         15,636       13,663
         Australia                            7,952        5,656
         Other International                  2,265        7,212
         Corporate and other                (11,499)     (11,972)
         Gain on disposal of assets           1,718        6,009
                                              -----        -----
          Consolidated total                $39,679      $44,772
                                            =======      =======


    Operating margin:
        North America                          10.1%        8.9%
        Europe                                 18.0%       17.2%
        West Africa                            26.5%       24.9%
        Australia                              22.5%       20.1%
        Other International                     6.9%       21.9%
          Consolidated total                   13.6%       15.4%

                              BRISTOW GROUP INC. AND SUBSIDIARIES
                                        AIRCRAFT COUNT
                                     AS OF JUNE 30, 2010
                        Aircraft in Consolidated Fleet
                        ------------------------------
                    Helicopters
                    -----------

                                                          Unconsolidated
                                             Fixed          Affiliates
                Small Medium Large Training  Wing  Total(1)    (2)       Total
                ----- ------ ----- --------  ----- -------- ------------ -----
    North
     America       74     28     6        -     -      108         -       108
    Europe          -     14    37        -     -       51        63       114
    West
     Africa        12     33     5        -     3       53         -        53
    Australia       2     13    18        -     -       33         -        33
    Other
     International  5     41    13        -     -       59       136       195
    Corporate
     and other      -      -     -       80     -       80         -        80
                  ---    ---   ---      ---   ---      ---       ---       ---
    Total          93    129    79       80     3      384       199       583
                  ===    ===   ===      ===   ===      ===       ===       ===
    Aircraft
     not
     currently
     in
     fleet:(3)
      On order      -      3     4        -     -        7
      Under
       option       -     28    13        -     -       41

    (1) Includes 14 aircraft held for sale.

    (2) The 199 aircraft operated or managed by our unconsolidated
    affiliates are in addition to those aircraft leased from us.

    (3) This table does not reflect aircraft which our unconsolidated
    affiliates may have on order or under option.

                      BRISTOW GROUP INC. AND SUBSIDIARIES
                             GAAP RECONCILIATIONS
    EBITDA is a measure that has not been prepared in accordance with GAAP and
    has not been audited or reviewed by our independent auditors.  EBITDA is
    therefore considered a non-GAAP financial measure.  A description of
    adjustments and a reconciliation to net income, the most comparable GAAP
    financial measure to EBITDA, is as follows (in thousands):

                                                   Three Months Ended
                                                        June 30,
                                                        --------
                                                    2010         2009
                                                    ----         ----
                                                       (Unaudited)
    Net income                                   $20,908      $23,991
    Provision for income taxes                     8,540        9,510
    Interest expense                              11,038       10,012
    Depreciation and amortization                 19,331       18,186
                                                  ------       ------
       EBITDA                                    $59,817      $61,699
                                                 =======      =======

SOURCE: Bristow Group Inc.