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News Release

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Bristow Group Reports Fiscal 2009 Third Quarter Financial Results
HOUSTON, Feb 04, 2009 /PRNewswire-FirstCall via COMTEX/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for the three months ended December 31, 2008, which is the Company's fiscal 2009 third quarter.

Highlights include:

For the December 2008 quarter:

  • Revenue increased 8% versus the December 2007 quarter to $283.0 million. Revenue gains occurred across most of our business units, but most significantly in our Europe, Latin America and West Africa business units. Revenue gains were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Norsk Helikopters AS ("Norsk"), our Norwegian affiliate, effective October 31, 2008.


  • Operating income increased 101% to $73.7 million from $36.7 million in the December 2007 quarter.


  • Income from continuing operations increased 82% to $47.6 million from $26.2 million in the December 2007 quarter.


  • Diluted earnings per share from continuing operations increased to $1.34 from $0.86 in the December 2007 quarter.

The largest factors affecting operating results for the December 2008 quarter include the following items:

  • The gain on the sale of 53 small aircraft, related inventory, spare parts and offshore fuel equipment in the U.S. Gulf of Mexico (the "GOM Asset Sale") on October 30, 2008, which increased operating income by $37.8 million, income from continuing operations by $24.4 million and diluted earnings per share by $0.69.


  • The strengthening U.S. Dollar and resulting changes in foreign currency exchange rates during the December 2008 quarter, which decreased operating income by $2.3 million, income from continuing operations by $2.5 million and diluted earnings per share by $0.07.


  • A decrease in our overall effective tax rate to 25.1% for the December 2008 quarter resulting from a $2.6 million benefit related to tax elections filed in the December 2008 quarter as part of an internal reorganization and the resolution of $1.4 million in uncertain tax positions, which increased income from continuing operations by $4.0 million and diluted earnings per share by $0.11. Excluding these benefits, as well as the impact of the taxes associated with the GOM Asset Sale, our overall effective tax rate for the December 2008 quarter was 25.5%.


  • Excluding the items discussed above, diluted earnings per share would have been $0.61 in the December 2008 quarter. Additionally, as a result of shares issued in our June 2008 equity offering and private placement, diluted earnings per share in the December 2008 quarter was further reduced by $0.21.

For the nine months ended December 31, 2008:

  • Revenue increased 14% versus the nine months ended December 31, 2007 to $858.8 million. Revenue gains occurred across all of our business units, but most significantly in our Europe, Southeast Asia, West Africa and U.S. Gulf of Mexico business units. Revenue gains were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Norsk.


  • Operating income increased 26% to $145.7 million from $115.3 million for the nine months ended December 31, 2007.


  • Income from continuing operations increased 21% to $98.3 million from $81.5 million for the nine months ended December 31, 2007.


  • Diluted earnings per share from continuing operations increased to $2.87 from $2.68 for the nine months ended December 31, 2007.

The largest factors affecting operating results for the nine months ended December 31, 2008 were:

  • The gain on the GOM Asset Sale, which increased operating income by $37.8 million, income from continuing operations by $24.4 million and diluted earnings per share by $0.71.


  • The strengthening U.S. dollar and resulting changes in foreign currency exchange rates during the nine months ended December 31, 2008, which decreased operating income by $6.0 million, income from continuing operations by $2.5 million and diluted earnings per share by $0.07.


  • Hurricanes in the U.S. Gulf of Mexico during the nine months ended December 31, 2008, which resulted in a decrease in flight activity and an increase in costs, reducing operating income by $2.1 million, income from continuing operations by $1.8 million and diluted earnings per share by $0.05.


  • Expense recognized in the nine months ended December 31, 2008 for a bad debt provision of $1.3 million in Europe and revenue recognized in the nine months ended December 31, 2008 related to contractual rate escalations and retroactive rate adjustments applicable to services performed in prior periods in Europe of $3.4 million and Russia, a part of our Other International business unit, of $1.2 million. Combined, these items increased operating income by $3.3 million, income from continuing operations by $2.3 million and diluted earnings per share by $0.07.


  • Decreases in operating results in Australia, part of our Southeast Asia business unit, which resulted in a reduction in operating income by $10.4 million, income from continuing operations by $7.4 million and diluted earnings per share by $0.22.


  • The restructuring of our ownership interests in affiliates in Mexico, part of our Latin America business unit, which resulted in several changes effective April 1, 2008, which increased operating income by $0.8 million, income from continuing operations by $3.7 million and diluted earnings per share by $0.11.


  • A decrease in our overall effective tax rate to 26.9% for the nine months ended December 31, 2008 resulting from a $2.6 million benefit related to tax elections filed in the December 2008 quarter as part of an internal reorganization and the resolution of $2.1 million in uncertain tax positions, which increased income from continuing operations by $4.7 million and diluted earnings per share by $0.14. Excluding these benefits, as well as the impact of the taxes associated with the GOM Asset Sale, our overall effective tax rate for the nine months ended December 31, 2008 was 28.5%.


  • Excluding the items discussed above, diluted earnings per share would have been $2.17 in the nine months ended December 31, 2008. Additionally, as a result of shares issued in our June 2008 equity offering and private placement, diluted earnings per share in the nine months ended December 31, 2008 was further reduced by $0.35.

Financial results for the nine months ended December 31, 2007 included:

  • A reversal of accrued costs of $1.0 million associated with the settlement of the U.S. Securities and Exchange Commission investigation.


  • The reversal of $5.4 million in sales tax contingency in Nigeria.


  • $2.0 million of contractual rate escalations on services performed in prior periods under contracts with our customers in Europe.


  • A $1.8 million impairment charge related to inventory in EH Centralized Operations.


  • These items collectively increased operating income by $6.6 million, income from continuing operations by $4.4 million and diluted earnings per share by $0.14 during the nine months ended December 31, 2007.

Capital and Liquidity

At December 31, 2008 we continued to have a strong balance sheet, which allows us the financial flexibility to take advantage of growth opportunities:

  • $1.2 billion in stockholders' investment and $747.3 million of indebtedness


  • $364.7 million in cash and $100 million undrawn revolving credit facility


  • Aircraft purchase commitments totaled $298.4 million for 31 aircraft, with options totaling $803.1 million for 47 aircraft

During the nine months ended December 31, 2008, we generated strong cash flows, including:

  • $104 million of cash from operating activities


  • $87 million of proceeds from sales of assets, including the GOM Asset Sale


  • $336 million in net proceeds from the sale of convertible senior notes and common stock


  • We used $388 million for capital expenditures - primarily for aircraft - and $16 million for acquisitions

CEO Remarks

"During our third fiscal quarter we continued to experience good growth in activity and revenue, particularly in Mexico, Brazil, Nigeria and the North Sea. This was driven by improved pricing and the continued upgrade of our fleet to larger, more efficient and more profitable aircraft," said William E. Chiles, President and Chief Executive Officer of Bristow Group Inc.

"Looking ahead, we know that Bristow will not be completely immune to the impact of declining commodity prices on E&P spending, but we do not expect to be as affected as other oil service companies. Although some of the demand for our services has softened and may continue to do so, our production focus, global critical mass of the largest fleet of helicopters and geographic and customer diversity should help us weather the cycle. We also continue to apply pricing and investment discipline.

"Our $465 million of cash and unused credit lines provides financial strength as we weather this uncertain operating environment and the flexibility to take advantage of good opportunities for long-term growth. We expect to continue to upgrade our fleet at a pace that should enable us to continue growing revenues and margins but at the same time recognizes the more challenging market environment we currently face," Chiles said.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EST (9:00 a.m. CST) on Wednesday, February 4, 2009, to review financial results for the fiscal 2009 third quarter ended December 31, 2008. 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 "Q3 2009 Bristow Group Inc. Earnings Conference Call"
  • Replay: A replay via webcast will be available approximately one hour after the call's completion

Via Telephone within the U.S.:

  • Live: Dial toll free (800) 240-2430
  • Replay: A telephone replay will be available through Wednesday, February 18, by dialing toll free (800) 405-2236, passcode: 11124864#

Via Telephone outside the U.S.:

  • Live: Dial (303) 262-2137
  • Replay: A telephone replay will be available through Wednesday, February 18, by dialing (303) 590-3000, passcode: 11124864#

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 most of the major offshore oil and gas producing regions of the world, including in the North Sea, the U.S. Gulf of Mexico, Nigeria and Australia. For more information, visit the Company's website at 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 declining commodity prices, fleet upgrades, revenue and margin growth, customer demand, future operations, future liquidity and growth plans and opportunities. 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 December 31, 2008 and the annual report on Form 10-K for the fiscal year ended March 31, 2008. 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          Nine Months
                                         Ended                Ended
                                      December 31,          December 31,
                                      ------------          ------------
                                    2007       2008       2007       2008
                                    ----       ----       ----       ----
     Gross revenue:
       Operating revenue from
        non-affiliates          $222,831   $236,491   $642,598   $726,151
       Operating revenue from
        affiliates                13,633     16,792     38,588     52,492
       Reimbursable revenue
        from non-affiliates       23,439     28,617     66,075     76,196
       Reimbursable revenue
        from affiliates            1,617      1,087      5,218      3,959
                                   -----      -----      -----      -----
                                 261,520    282,987    752,479    858,798
                                 -------    -------    -------    -------
     Operating expense:
       Direct cost               169,704    176,038    475,416    551,404
       Reimbursable expense       24,344     28,689     68,587     79,437
       Depreciation and
        amortization              12,445     16,663     36,127     47,103
       General and
        administrative            22,373     25,586     61,018     78,776
       Gain on GOM Asset Sale          -    (37,780)         -    (37,780)
       (Gain) loss on disposal
        of other assets           (4,094)       102     (3,921)    (5,865)
                                  ------        ---     ------     ------
                                 224,772    209,298    637,227    713,075
                                 -------    -------    -------    -------
       Operating income           36,748     73,689    115,252    145,723

     Earnings from
      unconsolidated
      affiliates, net of losses    3,725     (1,417)    11,233      8,277
     Interest income               3,697      1,087      9,781      5,739
     Interest expense             (6,684)    (7,603)   (16,135)   (24,500)
     Other income (expense), net     989     (1,522)     1,775      2,240
                                     ---     ------      -----      -----
       Income from continuing
        operations before
        provision for income
        taxes and minority
        interest                  38,475     64,234    121,906    137,479
     Provision for income taxes  (12,302)   (16,106)   (40,035)   (37,020)
     Minority interest                61       (535)      (392)    (2,190)
                                      --       ----       ----     ------
       Income from continuing
        operations                26,234     47,593     81,479     98,269
     Discontinued operations:
       Income (loss) from
        discontinued operations
        before provision for
        income taxes              (1,429)         -        690       (379)
       (Provision) benefit for
        income taxes on
        discontinued Operations   (4,657)         -     (5,399)       133
                                  ------        ---     ------        ---
       Loss from discontinued
        operations                (6,086)         -     (4,709)      (246)
                                  ------        ---     ------       ----
       Net income                 20,148     47,593     76,770     98,023
       Preferred stock
        dividends                 (3,162)    (3,162)    (9,487)    (9,487)
                                  ------     ------     ------     ------
       Net income available to
        common stockholders      $16,986    $44,431    $67,283    $88,536
                                 =======    =======    =======    =======
     Basic earnings per common
      share:
       Earnings from continuing
        operations                 $0.97      $1.53      $3.03      $3.21
       Loss from discontinued
        operations                 (0.26)         -      (0.19)     (0.01)
                                   -----        ---      -----      -----
       Net earnings                $0.71      $1.53      $2.84      $3.20
                                   =====      =====      =====      =====
     Diluted earnings per
      common share:
       Earnings from continuing
        operations                 $0.86      $1.34      $2.68      $2.87
       Loss from discontinued
        operations                 (0.20)         -      (0.16)     (0.01)
                                   -----        ---      -----      -----
       Net earnings                $0.66      $1.34      $2.52      $2.86
                                   =====      =====      =====      =====
     Weighted average number of
      common shares outstanding:
          Basic                   23,812     29,101     23,728     27,635
          Diluted                 30,527     35,628     30,450     34,185



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

                                                  March 31,     December 31,
                                                    2008           2008
                                                    ----           ----
                                                                (Unaudited)

                                ASSETS
     Current assets:
         Cash and cash equivalents                $290,050       $364,653
         Accounts receivable from
          non-affiliates                           204,599        182,061
         Accounts receivable from
          affiliates                                11,316         29,151
         Inventories                               176,239        158,340
         Prepaid expenses and other                 24,177         18,813
                                                    ------         ------
              Total current assets                 706,381        753,018
     Investment in unconsolidated
      affiliates                                    52,467         18,927
     Property and equipment - at cost:
         Land and buildings                         60,056         60,539
         Aircraft and equipment                  1,428,996      1,744,990
                                                 ---------      ---------
                                                 1,489,052      1,805,529
         Less - Accumulated depreciation and
          amortization                            (316,514)      (300,413)
                                                  --------       --------
                                                 1,172,538      1,505,116
     Goodwill                                       15,676         37,138
     Other assets                                   30,293         29,452
                                                    ------         ------
                                                $1,977,355     $2,343,651
                                                ==========     ==========

                  LIABILITIES AND STOCKHOLDERS' INVESTMENT
     Current liabilities:
         Accounts payable                          $49,650        $52,352
         Accrued wages, benefits and
          related taxes                             35,523         39,357
         Income taxes payable                        5,862         13,740
         Other accrued taxes                         1,589          2,194
         Deferred revenues                          15,415         17,736
         Accrued maintenance and repairs            13,250         14,613
         Accrued interest                            5,656          8,614
         Other accrued liabilities                  22,235         19,945
         Deferred taxes                              9,238          7,236
         Short-term borrowings and
          current maturities of
          long-term debt                             6,541          6,014
                                                     -----          -----
              Total current liabilities            164,959        181,801
     Long-term debt, less current maturities       599,677        741,301
     Accrued pension liabilities                   134,156         94,421
     Other liabilities and deferred
      credits                                       14,805         14,830
     Deferred taxes                                 91,747        106,208
     Minority interest                               4,570         11,098
     Commitments and contingencies
     Stockholders' investment:
         5.50% mandatory convertible
          preferred stock                          222,554        222,554
         Common stock                                  239            291
         Additional paid-in capital                186,390        418,852
         Retained earnings                         606,931        696,722
         Accumulated other
          comprehensive loss                       (48,673)      (144,427)
                                                   -------       --------
                                                   967,441      1,193,992
                                                $1,977,355     $2,343,651
                                                ==========     ==========



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

                                       Three Months          Nine Months
                                          Ended                Ended
                                       December 31,          December 31,
                                       ------------          ------------
                                     2007       2008       2007       2008
                                     ----       ----       ----       ----
    Flight hours (excludes Bristow
     Academy and unconsolidated
     affiliates):
        U.S. Gulf of Mexico         33,431     25,553    107,920     98,083
        Arctic                       1,227      1,279      6,632      7,411
        Latin America               10,417     15,228     32,594     36,758
        Europe                      11,625     13,241     33,940     33,812
        West Africa                  9,824      9,884     28,609     29,129
        Southeast Asia               4,590      4,500     11,578     14,223
        Other International          2,120      1,942      6,844      5,818
                                     -----      -----      -----      -----
          Consolidated total        73,234     71,627    228,117    225,234
                                    ======     ======    =======    =======

    Gross revenue:
        U.S. Gulf of Mexico        $53,259    $53,695   $164,635   $177,695
        Arctic                       2,570      3,005     12,217     14,088
        Latin America               16,476     20,707     49,463     59,964
        WH Centralized Operations    1,438      3,134      3,413      8,303
        Europe                      95,100    102,477    271,916    296,210
        West Africa                 46,287     50,478    125,369    140,788
        Southeast Asia              29,918     28,882     76,268     99,143
        Other International         11,874     13,223     35,375     40,459
        EH Centralized Operations    5,239      7,625     17,375     24,590
        Bristow Academy              3,969      5,563     10,216     17,286
        Intrasegment eliminations   (4,647)    (5,802)   (13,805)   (19,756)
        Corporate                       37          -         37         28
                                        --        ---         --         --
          Consolidated total      $261,520   $282,987   $752,479   $858,798
                                  ========   ========   ========   ========

    Operating income:
        U.S. Gulf of Mexico         $8,122     $8,721    $26,901    $24,973
        Arctic                         (72)       184      2,043      2,603
        Latin America                3,828      6,141     11,413     17,169
        WH Centralized Operations     (871)    (2,509)       491     (2,281)
        Europe                      20,695     16,340     57,165     55,785
        West Africa                  7,019     13,167     25,308     27,707
        Southeast Asia               6,476      5,094     15,710     10,344
        Other International            712      3,135      4,758      5,910
        EH Centralized Operations   (6,404)    (6,461)   (13,930)   (18,849)
        Bristow Academy               (130)      (168)      (612)       219
        Gain on GOM Asset Sale           -     37,780          -     37,780
        Gain (loss) on disposal of
         other assets                4,094       (102)     3,921      5,865
        Corporate                   (6,721)    (7,633)   (17,916)   (21,502)
                                    ------     ------    -------    -------
          Consolidated total       $36,748    $73,689   $115,252   $145,723
                                   =======    =======   ========   ========

    Operating margin:
       U.S. Gulf of Mexico            15.3 %     16.2 %     16.3 %     14.1 %
       Arctic                         (2.8)%      6.1 %     16.7 %     18.5 %
       Latin America                  23.2 %     29.7 %     23.1 %     28.6 %
       Europe                         21.8 %     15.9 %     21.0 %     18.8 %
       West Africa                    15.2 %     26.1 %     20.2 %     19.7 %
       Southeast Asia                 21.6 %     17.6 %     20.6 %     10.4 %
       Other International             6.0 %     23.7 %     13.5 %     14.6 %
       Bristow Academy                (3.3)%     (3.0)%     (6.0)%      1.3 %
         Consolidated total           14.1 %     26.0 %     15.3 %     17.0 %

SOURCE: Bristow Group Inc.

http://www.bristowgroup.com