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News Release

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Bristow Group Reports Fiscal Fourth Quarter and Full Fiscal Year 2018 Results
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HOUSTON, May 23, 2018 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported the following results for the fourth quarter and full fiscal year ended March 31, 2018. All amounts shown are dollar amounts in thousands unless otherwise noted:



Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change

Operating revenue


$

341,175



$

323,651



5.4

%


$

1,384,424



$

1,347,850



2.7

%

Net loss attributable to Bristow Group


(100,901)



(78,040)



(29.3)

%


(195,658)



(170,536)



(14.7)

%

Diluted loss per share


(2.84)



(2.22)



(27.9)

%


(5.54)



(4.87)



(13.8)

%

Adjusted EBITDA (1)


22,882



3,687



*



105,427



71,084



48.3

%

Adjusted net loss (1)


(17,038)



(40,302)



57.7

%


(75,007)



(74,525)



(0.6)

%

Adjusted diluted loss per share (1)


(0.48)



(1.15)



58.3

%


(2.13)



(2.13)



%

Operating cash flow


(10,237)



25,635



*



(19,544)



11,537



*


Capital expenditures


9,846



15,384



(36.0)

%


46,287



135,110



(65.7)

%

Rent expense


50,172



55,718



(10.0)

%


208,691



212,608



(1.8)

%

 



March 31,


December 31,


March 31,


% Change


% Change



2018


2017


2017


Quarter over quarter


Year over year

Cash


$

380,223



$

117,848



$

96,656






Undrawn borrowing capacity on Revolving Credit Facility (2)




387,584



260,320






Total liquidity


$

380,223



$

505,432



$

356,976



(24.8)

%


6.5

%






















______________



*       

percentage change too large to be meaningful or not applicable



(1)       

A full reconciliation of non-GAAP financial measures is included at the end of this news release.



(2)       

The Revolving Credit Facility was terminated on March 6, 2018. Our new $75 million Asset-Backed Revolving Credit Facility closed on April 17, 2018 and, therefore, availability under such facility is not included in liquidity as of March 31, 2018.

"The New Bristow was successful in executing our fiscal 2018 STRIVE priorities, including agreements to recover $136 million in OEM costs, reducing rent expense by returning aircraft to lessors, deferring approximately $190 million of capital expenditures, and increasing financial flexibility by completing over $700 million in new low cost financings," said Jonathan Baliff, President and Chief Executive Officer of Bristow Group. "Our fourth quarter results reflect our global team's delivery of world-class safety performance during very challenging times and the benefit of increased short-cycle offshore activity which continued to drive higher than expected adjusted EBITDA across all regions for fiscal 2018."

BUSINESS AND FINANCIAL HIGHLIGHTS

  • Net loss was $100.9 million ($2.84 per diluted share) for the March 2018 quarter compared to a net loss of $78.0 million ($2.22 per diluted share) for the March 2017 quarter.
  • Adjusted net loss was $17.0 million ($0.48 per diluted share) for the March 2018 quarter compared to an adjusted net loss of $40.3 million ($1.15 per diluted share) for the March 2017 quarter; the March 2018 quarter is adjusted for $83.9 million in net unfavorable special items, including impairment of our investment in Líder in Brazil, and the March 2017 quarter is adjusted for $37.7 million in net unfavorable special items.   
  • Fiscal year 2018 adjusted EBITDA of $105.4 million was up 48% over fiscal year 2017 adjusted EBITDA and in-line with increased adjusted EBITDA guidance provided in February 2018.
  • Cash increase of $262 million in the March 2018 quarter to $380 million reflects the net benefit of the funding of our $350 million 8.75% five-year Senior Secured Notes, the termination of our Revolving Credit Facility and term loan repayments of $52.6 million.
  • We expect fiscal year 2019 adjusted EBITDA to be in the range of $90 million to $140 million.

"I am honored to work with a team that delivered notable successes for our clients and investors in fiscal 2018, especially in the areas of safety on the field and liquidity on the balance sheet," said Jonathan Baliff. "Looking ahead, our fiscal 2019 priorities will focus on continued safety improvement, delivering world-class performance to our clients and proactively managing our cost structure across a more responsive, regionally-focused New Bristow, while we win more business in this short-cycle challenging market."

Operating revenue from external clients by line of service was as follows:



Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Oil and gas services


$

232,278



$

233,753



(0.6)

%


$

947,462



$

956,649



(1.0)

%

U.K. SAR services


58,659



43,963



33.4

%


222,965



189,555



17.6

%

Fixed wing services


49,845



43,498



14.6

%


209,719



191,609



9.5

%

Corporate and other


393



2,437



(83.9)

%


4,278



10,037



(57.4)

%

Total operating revenue


$

341,175



$

323,651



5.4

%


$

1,384,424



$

1,347,850



2.7

%

FOURTH QUARTER FY2018 RESULTS

The year-over-year increase in revenue was primarily driven by the increase in U.K. SAR services due to additional bases coming online and an increase from our fixed wing services in our Europe Caspian, Asia Pacific and Africa regions. These revenue increases were partially offset by a decrease in our oil and gas services driven by declines in our Asia Pacific and Africa regions, while revenue from oil and gas services in our Americas and Europe Caspian regions improved.

We reported a net loss of $100.9 million and diluted loss per share of $2.84 for the March 2018 quarter compared to a net loss of $78.0 million and diluted loss per share of $2.22 for the March 2017 quarter. The year-over-year change in net loss and diluted loss per share was primarily due to a loss on impairment in the March 2018 quarter and higher interest expense resulting from additional borrowings, partially offset by the increase in revenue discussed above and an income tax benefit.

The net loss for the March 2018 quarter was significantly impacted by the following special items:

  • Loss on impairment totaling $90.2 million ($62.4 million net of tax including an additional $31.2 million in tax resulting from the repositioning of certain aircraft from one tax jurisdiction to another related to recent financing transactions), or $1.76 per share, including:
    • Impairment of investment in unconsolidated affiliates of $85.7 million related to impairment of our investment in Líder in Brazil, and
    • Impairment on inventories of $4.5 million;
  • Organizational restructuring costs of $8.5 million ($6.0 million net of tax), or $0.17 per share, all of which is severance expense; $6.4 million of the restructuring costs are included in direct costs and $2.1 million are included in general and administrative expense;
  • Early extinguishment of debt of $1.9 million ($1.3 million net of tax), or $0.04 per share, included in interest expense, which includes $1.8 million related to write-off of deferred financing fees and $0.1 million related to write-off of discount on debt; and
  • Loss on disposal of assets of $5.2 million ($40.1 million net of tax), or $1.13 per share; partially offset by
  • A non-cash benefit from tax items of $25.8 million, or $0.73 per share, that includes a one-time non-cash tax effect from the true-up of the one-time transition tax on the repatriation of foreign earnings under the Tax Cuts and Jobs Act (the "Act") of $31.2 million and net reversal of valuation allowances on deferred tax assets of $17.3 million, partially offset by a $22.7 million expense related to the true-up of the revaluation of net deferred tax liabilities to a lower tax rate resulting from the Act.

Excluding these items, adjusted net loss and adjusted diluted loss per share improved to $17.0 million and $0.48, respectively, for the March 2018 quarter compared to $40.3 million and $1.15, respectively, for the March 2017 quarter. Adjusted EBITDA also improved year-over-year to $22.9 million in the March 2018 quarter from $3.7 million in the March 2017 quarter primarily due an increase in operating revenue in our Europe Caspian region, primarily due to additional bases coming online for U.K. SAR, and increased activity and in our Americas region, primarily due to increased activity in the U.S. Gulf of Mexico.

LIQUIDITY AND FINANCIAL FLEXIBILITY

Our cash balance of $380 million as of March 31, 2018 reflects the net benefit from closing and funding the $350 million 8.75% five-year Senior Secured Notes and the repayment of our April 2019 bank maturities.

Don Miller, Senior Vice President and Chief Financial Officer, commented, "Fiscal year 2018 was a very successful year for Bristow as we materially improved our liquidity runway by repaying our 2019 bank maturities with the closing and funding of over $700 million in new low cost capital eliminating near term refinancing risk. The success of these financings will allow us to continue to focus on increasing revenue, reducing costs, and improving returns on our assets."

REGIONAL PERFORMANCE

Europe Caspian




Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Operating revenue


$

194,429



$

162,511



19.6

%


$

765,412



$

710,581



7.7

%

Operating income (loss)


$

3,164



(4,628)



*


$

22,774



13,840



64.6

%

Operating margin


1.6

%


(2.8)

%


*


3.0

%


1.9

%


57.9

%

Adjusted EBITDA


$

22,787



$

1,890



*


$

81,503



$

45,163



80.5

%

Adjusted EBITDA margin


11.7

%


1.2

%


*


10.6

%


6.4

%


65.6

%

Rent expense


$

31,355



$

34,065



(8.0)

%


$

134,158



$

134,072



0.1

%

Loss on impairment


$

4,525



$



*


$

4,525



$

8,706



(48.0)

%


_______________



*      

percentage change too large to be meaningful or not applicable

The increase in operating revenue for the March 2018 quarter and fiscal year 2018 primarily resulted from an increase in activity and short-term contracts in Norway, the start-up of U.K. SAR bases and an increase in fixed wing revenue. Partially offsetting these increases was a decrease in U.K. oil and gas revenue resulting from the continued impact of the industry downturn on exploration activity. Eastern Airways contributed $30.7 million and $24.5 million in operating revenue for the March 2018 and 2017 quarters, respectively, and $118.5 million and $110.4 million in operating revenue for fiscal years 2018 and 2017, respectively.

During the March 2018 quarter and fiscal year 2018, our results for the Europe Caspian region were impacted by a reduction in rent expense of $2.8 million and $9.9 million, respectively, related to OEM cost recoveries that increased operating income and adjusted EBITDA.

During the March 2018 quarter and fiscal year 2018, we recorded an inventory impairment charge of $4.5 million for our fixed wing operations at Eastern Airways as a result of changes in expected future utilization of aircraft within those operations. During fiscal year 2017, we recorded an impairment charge of $8.7 million of goodwill related to Eastern Airways. Both the inventory and goodwill impairment charges were included in operating income, but were adjusted for in our calculation of adjusted EBITDA.

A substantial portion of our revenue in the Europe Caspian region is contracted in British pound sterling, which depreciated significantly against the U.S. dollar in fiscal year 2017 due to Brexit with a modest recovery in fiscal year 2018. As a result of the changes in the British pound sterling, adjusted EBITDA was favorably impacted by foreign currency exchange rate changes of $4.3 million and $9.2 million, respectively, during the March 2018 quarter and fiscal year 2018 compared to an unfavorable impact of $6.3 million and $35.6 million, respectively, during the March 2017 quarter and fiscal year 2017.

Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin increased in the March 2018 quarter and fiscal year 2018 primarily due to the increase in operating revenue, the reduction in rent expense related to the OEM cost recoveries and favorable impacts from changes in foreign currency exchange rates. These benefits were partially offset by increased salaries and benefits and maintenance expense year-over-year due to the increase in activity. Eastern Airways generated a negative $3.3 million and negative $4.3 million in adjusted EBITDA for the March 2018 and 2017 quarters, respectively, and a negative $6.9 million and negative $4.5 million in adjusted EBITDA for fiscal years 2018 and 2017, respectively.

Africa




Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Operating revenue


$

45,307



$

47,049



(3.7)

%


$

191,830



$

200,104



(4.1)

%

Earnings from unconsolidated affiliates


$

2,518



$

2,025



24.3

%


$

2,518



$

2,068



21.8

%

Operating income


$

3,973



$

10,225



(61.1)

%


$

32,326



$

30,179



7.1

%

Operating margin


8.8

%


21.7

%


(59.4)

%


16.9

%


15.1

%


11.9

%

Adjusted EBITDA


$

12,213



$

12,203



0.1

%


$

52,419



$

51,553



1.7

%

Adjusted EBITDA margin


27.0

%


25.9

%


4.2

%


27.3

%


25.8

%


5.8

%

Rent expense


$

2,133



$

2,000



6.7

%


$

8,557



$

8,101



5.6

%

The decrease in operating revenue for the March 2018 quarter and fiscal year 2018 primarily resulted from an overall decrease in activity compared to the prior year periods. Activity declined with certain clients and certain contracts ended, partially offset by an increase in activity from other clients. Additionally, fixed wing services in Africa generated operating revenue of $1.9 million and $1.8 million, respectively, for the March 2018 and 2017 quarters and $7.4 million and $4.2 million, respectively, for fiscal years 2018 and 2017.

Operating income and operating margin decreased in the March 2018 quarter primarily due to employee severance costs resulting from the expiration of a significant contract in this region which was not renewed. Operating income and operating margin increased in fiscal year 2018 primarily due to a decrease in depreciation and amortization expense and lower operating expenses. Adjusted EBITDA increased in the March 2018 quarter and fiscal year 2018 compared to prior comparative periods primarily due to a favorable exchange rate impact compared to fiscal year 2017.

On March 31, 2018, a significant contract in this region expired and was not renewed. Additionally, changing regulations and political environment have made, and are expected to continue to make, our operating results for Nigeria unpredictable. Market uncertainty related to the oil and gas downturn has continued in this region, putting smaller clients under increasing pressure as their activity declined, which has reduced our activity levels and overall pricing.

Americas




Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Operating revenue


$

57,480



$

51,966



10.6

%


$

236,364



$

220,544



7.2

%

Earnings from unconsolidated affiliates


$

590



$

253



133.2

%


$

4,302



$

5,207



(17.4)

%

Operating income (loss)


$

(84,592)



$

(1,566)



*


$

(73,057)



$

4,224



*

Operating margin


(147.2)

%


(3.0)

%


*


(30.9)

%


1.9

%


*

Adjusted EBITDA


$

7,580



$

5,635



34.5

%


$

41,010



$

39,952



2.6

%

Adjusted EBITDA margin


13.2

%


10.8

%


22.2

%


17.4

%


18.1

%


(3.9)

%

Rent expense


$

6,440



$

6,757



(4.7)

%


$

24,920



$

23,015



8.3

%

Loss on impairment


$

85,683



$



*


$

85,683



$



*


_______________



*      

percentage change too large to be meaningful or not applicable

Operating revenue increased for the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due an increase in activity from our U.S. Gulf of Mexico operations and additional revenue from the search and rescue consortium in the U.S. Gulf of Mexico.

Earnings from unconsolidated affiliates, net of losses, decreased for fiscal year 2018 compared to fiscal year 2017 primarily due to a decrease in earnings from our investment in Líder in Brazil due to reduction in activity, partially offset by less of an unfavorable change in exchange rates. Changes in foreign currency exchange rates decreased our earnings from our investment in Líder by $0.3 million, $0.6 million, $2.0 million and $3.2 million in the March 2018 quarter, March 2017 quarter, fiscal year 2018 and fiscal year 2017, respectively.

Líder's management has significantly decreased their future financial projections as a result of recent tender awards announced by Petrobras. Petrobras represented 64% and 66% of Líder's operating revenue in calendar years 2017 and 2016, respectively. This significant decline in future forecasted results, coupled with previous declining financial results, triggered our review of the investment for potential impairment as of March 31, 2018. Based on the estimated fair value, we recorded an $85.7 million impairment in the March 2018 quarter. Our remaining investment in Líder as of March 31, 2018 is $62.3 million.

The decreases in operating income (loss) and operating margin for the March 2018 quarter and fiscal year 2018 is primarily due to the impairment of our investment in Líder discussed above. The increases in adjusted EBITDA and adjusted EBITDA margin for the March 2018 quarter and fiscal year 2018 were primarily driven by the increase in revenue discussed above.

Asia Pacific




Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Operating revenue


$

47,825



$

62,628



(23.6)

%


$

201,190



$

217,772



(7.6)

%

Operating income (loss)


$

(4,916)



$

3,610



*


$

(24,290)



$

(20,870)



(16.4)

%

Operating margin


(10.3)

%


5.8

%


*


(12.1)

%


(9.6)

%


(26.0)

%

Adjusted EBITDA


$

(1,926)



$

5,487



*


$

(1,424)



$

(5,026)



71.7

%

Adjusted EBITDA margin


(4.0)

%


8.8

%


*


(0.7)

%


(2.3)

%


69.6

%

Rent expense


$

8,552



$

10,956



(21.9)

%


$

32,908



$

39,759



(17.2)

%

Operating revenue decreased in the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due to the early cancellation of a contract that generated an additional $17.2 million of operating revenue in the March 2017 quarter.

Airnorth contributed $17.2 million in operating revenue for both the March 2018 and 2017 quarters, and a negative $1.4 million and a negative $0.7 million in adjusted EBITDA for the March 2018 and 2017 quarters, respectively, and $83.8 million and $77.1 million in operating revenue and $7.2 million and $7.1 million in adjusted EBITDA for fiscal years 2018 and 2017, respectively.

Operating income (loss), operating margin, adjusted EBITDA and adjusted EBITDA margin declined for the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due to the contract cancellation discussed above, which contributed $11.1 million of operating income and adjusted EBITDA in the March 2017 quarter, and a decline in oil and gas revenue, which was only partially offset by cost reduction efforts.

Corporate and other




Fourth Quarter


Full Year



FY2018


FY2017


% Change


FY2018


FY2017


% Change
















(in thousands, except percentages)

Operating revenue


$

393



$

2,452



(84.0)

%


$

4,305



$

10,369



(58.5)

%

Operating loss


$

(20,287)



$

(25,747)



21.2

%


$

(88,996)



$

(104,616)



14.9

%

Adjusted EBITDA


$

(17,772)



$

(21,528)



17.4

%


$

(68,081)



$

(60,558)



(12.4)

%

Rent expense


$

1,692



$

1,940



(12.8)

%


$

8,148



$

7,661



6.4

%

Loss on impairment


$



$



*


$

1,192



$

7,572



(84.3)

%


_______________



*      

percentage change too large to be meaningful or not applicable

Operating revenue decreased in the March 2018 quarter and fiscal year 2018 compared to prior periods primarily due to the sale of Bristow Academy on November 1, 2017.

Operating loss and adjusted EBITDA improved for the March 2018 quarter compared to the March 2017 quarter primarily due to a reduction in general and administrative expenses, partially offset by the decline in revenue discussed above. Operating loss for fiscal years 2018 and 2017 was most significantly impacted by $1.2 million and $7.6 million, respectively, of inventory impairment charges and a reduction in general and administrative expenses, partially offset by the decline in revenue. Adjusted EBITDA decreased year-over-year primarily due to foreign currency transaction losses of $4.4 million for fiscal year 2018 versus foreign currency transaction gains of $14.5 million for fiscal year 2017. This change in foreign currency impacts was partially offset by overall cost reduction activities that decreased general and administrative expenses as discussed above.

During fiscal years 2018 and 2017, we recorded $9.5 million and $10.9 million, respectively, related to organizational restructuring costs, which along with the inventory impairment charges discussed above, are excluded from adjusted EBITDA.

FY 2019 GUIDANCE

Guidance for selected financial measures is included in the tables that follow.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Thursday, May 24, 2018 to review financial results for the fiscal year 2018 fourth quarter and year ended March 31, 2018.  This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com.  The conference call can be accessed as follows:

Via Webcast:

  • Visit Bristow Group's investor relations Web page at www.bristowgroup.com
  • Live: Click on the link for "Bristow Group Fiscal 2018 Fourth 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 1-877-404-9648

Via Telephone outside the U.S.:

  • Live: Dial 1-412-902-0030

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is the leading global industrial aviation services provider offering helicopter transportation, search and rescue (SAR) and aircraft support services, including maintenance, to government and civil organizations worldwide. Bristow 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 Australia, Brazil, Canada, Russia and Trinidad. Bristow provides SAR services to the private sector worldwide and to the public sector for all of the U.K. on behalf of the Maritime and Coastguard Agency. For more information, visit 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 earnings guidance, expected contract revenue, capital deployment strategy, operational and capital performance, expected cost management activities, expected capital expenditure deferrals, shareholder return, liquidity and 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. Risks and uncertainties include without limitation: fluctuations in the demand for our services; fluctuations in worldwide prices of and supply and demand for oil and natural gas; fluctuations in levels of oil and natural gas production, exploration and development activities; the impact of competition; actions by clients and suppliers; the risk of reductions in spending on industrial aviation services by governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange rates and controls; risks associated with international operations; operating risks inherent in our business, including the possibility of declining safety performance; general economic conditions including the capital and credit markets; our ability to obtain financing; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our ability to re-deploy our aircraft to regions with greater demand; our ability to acquire additional aircraft and dispose of older aircraft through sales into the aftermarket; the possibility that we do not achieve the anticipated benefit of our fleet investment program; availability of employees; and political instability, war or acts of terrorism in any of the countries where we operate. 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, 2017 and annual report on Form 10-K for the fiscal year ended March 31, 2017.  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.

(financial tables follow)

Investor Relations
Linda McNeill
Director, Investor Relations
+1 713.267.7622

Global Media Relations
Adam Morgan
Director, Global Communications
+1 281.253.9005

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts and percentages)

(Unaudited)



Fourth Quarter


Full Year


FY2018


FY2017


FY2018


FY2017









Gross revenue:








Operating revenue from non-affiliates

$

325,640



$

306,595



$

1,317,295



$

1,276,374


Operating revenue from affiliates

15,535



17,056



67,129



71,476


Reimbursable revenue from non-affiliates

17,267



12,543



60,538



52,652



358,442



336,194



1,444,962



1,400,502










Operating expense:








Direct cost

281,040



272,468



1,123,168



1,103,984


Reimbursable expense

16,981



12,217



59,346



50,313


Depreciation and amortization

29,923



25,694



124,042



118,748


General and administrative

46,292



46,089



184,987



195,367



374,236



356,468



1,491,543



1,468,412










Loss on impairment

(90,208)





(91,400)



(16,278)


Loss on disposal of assets

(5,177)



(1,422)



(17,595)



(14,499)


Earnings from unconsolidated affiliates, net of losses

3,344



2,168



6,738



6,945










Operating loss

(107,835)



(19,528)



(148,838)



(91,742)


Interest expense, net

(23,383)



(15,386)



(77,060)



(49,919)


Other income (expense), net

(3,223)



(1,123)



(3,076)



(2,641)


Loss before benefit (provision) for income taxes

(134,441)



(36,037)



(228,974)



(144,302)


Benefit (provision) for income taxes

33,437



(43,626)



30,891



(32,588)


Net loss

(101,004)



(79,663)



(198,083)



(176,890)


Net loss attributable to noncontrolling interests

103



1,623



2,425



6,354


Net loss attributable to Bristow Group

$

(100,901)



$

(78,040)



$

(195,658)



$

(170,536)










Loss per common share:








Basic

$

(2.84)



$

(2.22)



$

(5.54)



$

(4.87)


Diluted

$

(2.84)



$

(2.22)



$

(5.54)



$

(4.87)


















Non-GAAP measures:








Adjusted EBITDA

$

22,882



$

3,687



$

105,427



$

71,084


Adjusted EBITDA margin

6.7

%


1.1

%


7.6

%


5.3

%

Adjusted net loss

$

(17,038)



$

(40,302)



$

(75,007)



$

(74,525)


Adjusted diluted loss per share

$

(0.48)



$

(1.15)



$

(2.13)



$

(2.13)


 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



March 31,


2018


2017

ASSETS

Current assets:




Cash and cash equivalents

$

380,223



$

96,656


Accounts receivable from non-affiliates

233,386



198,129


Accounts receivable from affiliates

13,594



8,786


Inventories

129,614



124,911


Assets held for sale

30,348



38,246


Prepaid expenses and other current assets

47,234



41,143


Total current assets

834,399



507,871


Investment in unconsolidated affiliates

126,170



210,162


Property and equipment – at cost:




Land and buildings

250,040



231,448


Aircraft and equipment

2,511,131



2,622,701



2,761,171



2,854,149


Less – Accumulated depreciation and amortization

(693,151)



(599,785)



2,068,020



2,254,364


Goodwill

19,907



19,798


Other assets

116,506



121,652


Total assets

$

3,165,002



$

3,113,847






LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' INVESTMENT

Current liabilities:




Accounts payable

$

101,270



$

98,215


Accrued wages, benefits and related taxes

62,385



59,077


Income taxes payable

8,453



15,145


Other accrued taxes

7,378



9,611


Deferred revenue

15,833



19,911


Accrued maintenance and repairs

28,555



22,914


Accrued interest

16,345



12,909


Other accrued liabilities

65,978



46,679


Deferred taxes



830


Short-term borrowings and current maturities of long-term debt

56,700



131,063


Total current liabilities

362,897



416,354


Long-term debt, less current maturities

1,429,834



1,150,956


Accrued pension liabilities

37,034



61,647


Other liabilities and deferred credits

36,952



28,899


Deferred taxes

115,192



154,873


Redeemable noncontrolling interest



6,886


Stockholders' investment:




Common stock

382



379


Additional paid-in capital

852,565



809,995


Retained earnings

793,783



991,906


Accumulated other comprehensive loss

(286,094)



(328,277)


Treasury shares, at cost

(184,796)



(184,796)


Total Bristow Group stockholders' investment

1,175,840



1,289,207


Noncontrolling interests

7,253



5,025


Total stockholders' investment

1,183,093



1,294,232


Total liabilities, redeemable noncontrolling interest and stockholders' investment

$

3,165,002



$

3,113,847


 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Full Year


FY2018


FY2017

Cash flows from operating activities:




Net loss

$

(198,083)



$

(176,890)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:




Depreciation and amortization

124,042



118,748


Deferred income taxes

(49,334)



15,720


Write-off of deferred financing fees

2,969



923


Discount amortization on long-term debt

1,701



1,606


Loss on disposal of assets

17,595



14,499


Loss on impairment

91,400



16,278


Deferral of lease payments

3,991




Stock-based compensation

10,436



12,352


Equity in earnings from unconsolidated affiliates in excess of dividends received

(3,780)



(4,438)


Increase (decrease) in cash resulting from changes in:




Accounts receivable

(32,459)



23,759


Inventories

(2,154)



(1,958)


Prepaid expenses and other assets

11,913



1,267


Accounts payable

(3,385)



15,052


Accrued liabilities

6,070



(19,713)


Other liabilities and deferred credits

(466)



(5,668)


Net cash provided by (used in) operating activities

(19,544)



11,537


Cash flows from investing activities:




Capital expenditures

(46,287)



(135,110)


Proceeds from asset dispositions

48,740



18,471


Proceeds from OEM cost recoveries

94,463




Deposit received on aircraft held for sale



290


Net cash provided by (used in) investing activities

96,916



(116,349)


Cash flows from financing activities:




Proceeds from borrowings

896,874



708,267


Payment of contingent consideration



(10,000)


Debt issuance costs

(20,560)



(8,010)


Repayment of debt and debt redemption premiums

(671,567)



(570,328)


Purchase of 4½% Convertible Senior Notes call option

(40,393)




Proceeds from issuance of warrants

30,259




Partial prepayment of put/call obligation

(49)



(49)


Dividends paid to noncontrolling interest

(331)



(2,533)


Common stock dividends paid

(2,465)



(9,831)


Repurchases for tax withholdings on vesting of equity awards

(2,740)



(835)


Net cash provided by financing activities

189,028



106,681


Effect of exchange rate changes on cash and cash equivalents

17,167



(9,523)


Net increase (decrease) in cash and cash equivalents

283,567



(7,654)


Cash and cash equivalents at beginning of period

96,656



104,310


Cash and cash equivalents at end of period

$

380,223



$

96,656


 

BRISTOW GROUP INC. AND SUBSIDIARIES

SELECTED OPERATING DATA

(In thousands, except flight hours and percentages)

(Unaudited)




Fourth Quarter


Full Year



FY2018


FY2017


FY2018


FY2017

Flight hours (excluding Bristow Academy and unconsolidated affiliates):









Europe Caspian


22,347



20,203



91,109



85,906


Africa


6,645



6,704



29,206



29,573


Americas


7,887



6,151



31,697



23,655


Asia Pacific


6,326



6,359



26,317



26,118


Consolidated


43,205



39,417



178,329



165,252











Operating revenue:









Europe Caspian


$

194,429



$

162,511



$

765,412



$

710,581


Africa


45,307



47,049



191,830



200,104


Americas


57,480



51,966



236,364



220,544


Asia Pacific


47,825



62,628



201,190



217,772


Corporate and other


393



2,452



4,305



10,369


Intra-region eliminations


(4,259)



(2,955)



(14,677)



(11,520)


Consolidated


$

341,175



$

323,651



$

1,384,424



$

1,347,850











Operating income (loss):









Europe Caspian


$

3,164



$

(4,628)



$

22,774



$

13,840


Africa


3,973



10,225



32,326



30,179


Americas


(84,592)



(1,566)



(73,057)



4,224


Asia Pacific


(4,916)



3,610



(24,290)



(20,870)


Corporate and other


(20,287)



(25,747)



(88,996)



(104,616)


Loss on disposal of assets


(5,177)



(1,422)



(17,595)



(14,499)


Consolidated


$

(107,835)



$

(19,528)



$

(148,838)



$

(91,742)











Operating margin:









Europe Caspian


1.6

%


(2.8)

%


3.0

%


1.9

%

Africa


8.8

%


21.7

%


16.9

%


15.1

%

Americas


(147.2)

%


(3.0)

%


(30.9)

%


1.9

%

Asia Pacific


(10.3)

%


5.8

%


(12.1)

%


(9.6)

%

Consolidated


(31.6)

%


(6.0)

%


(10.8)

%


(6.8)

%










Adjusted EBITDA:









Europe Caspian


$

22,787



$

1,890



$

81,503



$

45,163


Africa


12,213



12,203



52,419



51,553


Americas


7,580



5,635



41,010



39,952


Asia Pacific


(1,926)



5,487



(1,424)



(5,026)


Corporate and other


(17,772)



(21,528)



(68,081)



(60,558)


Consolidated


$

22,882



$

3,687



$

105,427



$

71,084











Adjusted EBITDA margin:









Europe Caspian


11.7

%


1.2

%


10.6

%


6.4

%

Africa


27.0

%


25.9

%


27.3

%


25.8

%

Americas


13.2

%


10.8

%


17.4

%


18.1

%

Asia Pacific


(4.0)

%


8.8

%


(0.7)

%


(2.3)

%

Consolidated


6.7

%


1.1

%


7.6

%


5.3

%

 



Fourth Quarter


Full Year



FY2018


FY2017


FY2018


FY2017

Depreciation and amortization:









Europe Caspian


$

12,065



$

5,917



$

48,854



$

39,511


Africa


3,375



3,984



13,705



16,664


Americas


6,562



7,058



27,468



32,727


Asia Pacific


4,348



5,505



19,695



19,091


Corporate and other


3,573



3,230



14,320



10,755


Consolidated


$

29,923



$

25,694



$

124,042



$

118,748











Rent expense:









Europe Caspian


$

31,355



$

34,065



$

134,158



$

134,072


Africa


2,133



2,000



8,557



8,101


Americas


6,440



6,757



24,920



23,015


Asia Pacific


8,552



10,956



32,908



39,759


Corporate and other


1,692



1,940



8,148



7,661


Consolidated


$

50,172



$

55,718



$

208,691



$

212,608


 

BRISTOW GROUP INC. AND SUBSIDIARIES

AIRCRAFT COUNT

As of March 31, 2018

(Unaudited)





Aircraft in Consolidated Fleet





Percentage

of FY2018

Operating

Revenue


Helicopters






Small


Medium


Large


Fixed
Wing (1)


Total (2)(3)


Unconsolidated
Affiliates (4)






Total

Europe Caspian

55

%




16



82



34



132





132


Africa

14

%


9



28



4



4



45



48



93


Americas

17

%


16



41



16





73



62



135


Asia Pacific

14

%




10



21



14



45





45


Total

100

%


25



95



123



52



295



110



405


Aircraft not currently in

  fleet: (5)















On order







27





27





Under option







4





4






_______________



(1)       

Includes 34 fixed wing aircraft operated by Eastern Airways that are included in the Europe Caspian region, three fixed wing aircraft for which Eastern Airways provides technical support in our Africa region and 14 fixed wing aircraft operated by Airnorth that are included in the Asia Pacific region.



(2)       

Includes 11 aircraft held for sale and 105 leased aircraft as follows:

 



Held for Sale Aircraft in Consolidated Fleet



Helicopters






Small


Medium


Large


Fixed

Wing


Total

Europe Caspian




2







2


Africa




3





1



4


Americas




4







4


Asia Pacific








1



1


Total




9





2



11















Leased Aircraft in Consolidated Fleet



Helicopters






Small


Medium


Large


Fixed

Wing


Total

Europe Caspian




6



42



15



63


Africa




1



2



2



5


Americas


3



14



6





23


Asia Pacific




3



7



4



14


Total


3



24



57



21



105




(3)       

The average age of our fleet, excluding training aircraft, was nine years as of March 31, 2018.



(4)       

The 110 aircraft operated by our unconsolidated affiliates do not include those aircraft leased to us. Includes 41 helicopters (primarily medium) and 20 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Americas region, 41 helicopters and seven fixed wing aircraft owned by Petroleum Air Services, which is included in our Africa region, and one helicopter operated by Cougar, our unconsolidated affiliate in Canada, which is included in our Americas region.



(5)       

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

 

BRISTOW GROUP INC. AND SUBSIDIARIES


FY 2019 GUIDANCE


FY 2019 guidance as of March 31, 2018 (1)


Operating revenue 2

Adjusted EBITDA2,3

Rent2

Oil and gas

~$825M - $925M

~$20M - $50M

~$115M - $125M

U.K. SAR

~$230M - $240M

~$70M - $80M

~$45M - $50M

Eastern

~$90M - $100M

~$(5M) - $0M

~$10M - $12M

Airnorth

~$80M - $90M

~$5M - $10M

~$8M - $10M

Total

~$1.25B - $1.35B

~$90M - $140M

~$185M - $195M





G&A expense

~$150M - $170M



Depreciation expense

~$115M - $125M



Total aircraft rent 4

~$160M - $165M



Total non-aircraft rent 4

~$25M - $30M



Interest expense

~$100M - $110M



Non-aircraft capex

~$25M annually



Aircraft sale proceeds

~$15M annually




_____________



(1)       

FY 2019 guidance assumes foreign exchange rates as of March 31, 2018.



(2)       

Operating revenue, adjusted EBITDA and rent for oil and gas includes corporate and other revenue and the impact of corporate overhead expenses.



(3)       

Adjusted EBITDA for U.K. SAR and fixed wing (Eastern/Airnorth) excludes corporate overhead allocations consistent with financial reporting. Adjusted EBITDA is a non-GAAP measure of which the most comparable GAAP measure is net income (loss). We have not provided a reconciliation of this non-GAAP forward-looking information to GAAP. The most comparable GAAP measure to adjusted EBITDA is net income (loss), which is not calculated at this lower level of our business as we do not allocate certain costs, including corporate and other overhead costs, interest expense and income taxes within our accounting system. Providing this data would require unreasonable efforts in the form of allocations of other costs across the organization.



(4)       

Total aircraft rent and total non-aircraft rent are inclusive of the respective components of rent expense for U.K. SAR, Eastern, Airnorth plus oil and gas.

 

BRISTOW GROUP INC. AND SUBSIDIARIES

GAAP RECONCILIATIONS

(Unaudited)


These financial measures have not been prepared in accordance with generally accepted accounting principles ("GAAP") and have not been audited or reviewed by our independent auditor.  These financial measures are therefore considered non-GAAP financial measures.  A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:




Fourth Quarter


Full Year



FY2018


FY2017


FY2018


FY2017












(In thousands, except per share amounts and percentages)

Net loss


$

(101,004)



$

(79,663)



$

(198,083)



$

(176,890)


Loss on disposal of assets


5,177



1,422



17,595



14,499


Special items


98,675



(3,084)



115,027



31,277


Depreciation and amortization


29,923



25,694



124,042



118,748


Interest expense


23,548



15,692



77,737



50,862


Provision (benefit) for income taxes


(33,437)



43,626



(30,891)



32,588


Adjusted EBITDA


$

22,882



$

3,687



$

105,427



$

71,084











Benefit (provision) for income taxes


$

33,437



(43,626)



$

30,891



$

(32,588)


Tax provision (benefit) on loss on disposal of asset


34,882



(618)



42,943



(6,476)


Tax provision (benefit) on special items


(56,729)



38,923



(58,016)



49,342


Adjusted benefit (provision) for income taxes


$

11,590



$

(5,321)



$

15,818



$

10,278











Effective tax rate (1)


24.9

%


(121.1)

%


13.5

%


(22.6)

%

Adjusted effective tax rate (1)


40.3

%


(14.5)

%


17.0

%


11.7

%










Net loss attributable to Bristow Group


$

(100,901)



$

(78,040)