Bristow Group Reports Strong Fiscal 2008 Second Quarter Results

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HOUSTON, Nov. 5 /-/ -- Bristow Group Inc. (NYSE: BRS) today reported financial results for its fiscal 2008 second quarter ended September 30, 2007.

    Highlights include:

    For the quarter ended September 30, 2007:

    -- Revenue of $273.3 million increased by 21.9 percent over the second

     quarter of fiscal year 2007. Revenue gains occurred in most of our

     business units, driven by increases in rates for helicopter services

     and the addition of new aircraft;

    -- Operating income of $50.6 million and operating margin of 18.5 percent

     increased over operating income of $30.9 million and operating margin

     of 13.8 percent for the second quarter of fiscal year 2007, primarily

     as a result of the improvement in revenue as well as the items

     discussed below;

    -- Net income of $34.0 million increased by $14.9 million versus net

     income for the second quarter of fiscal year 2007. Increases in

     operating income, foreign currency gains and earnings from

     unconsolidated affiliates contributed to the improvement in the latest

     quarter's net income;

    -- Diluted earnings per share increased to $1.12 from $0.79 for the second

     quarter of fiscal year 2007. Diluted earnings per share for the second

     quarter of fiscal years 2008 and 2007 reflected the assumed conversion

     of the Company's Mandatory Convertible Preferred Stock, which added

     approximately 6.5 million and 0.7 million shares, respectively, to the

     weighted average diluted shares calculation.

    -- Operating results for the second quarter of fiscal year 2008 included

     the following items:

     -- Reversal of $1.0 million of previously accrued settlement costs

     associated with the U.S. Securities and Exchange Commission ("SEC")

     investigation settled in September 2007.

     -- Reversal of a $5.4 million accrual for sales tax contingency in

     Nigeria.

     -- $2.1 million of retroactive rate increases with a major customer in

     Nigeria.

    Excluding these items, operating income, operating margin, net income and diluted EPS would have been $42.1 million, 15.5%, $28.4 million and $0.93 per common share, respectively.

    For the six months ended September 30, 2007:

    -- Revenue of $518.3 million increased by 16.4 percent over the same

     period of fiscal year 2007. Revenue gains occurred in most of our

     business units, driven by increases in rates for helicopter services

     and the addition of new aircraft;

    -- Operating income of $80.5 million and operating margin of 15.5 percent

     increased over operating income of $61.9 million and operating margin

     of 13.9 percent for the same period in fiscal year 2007, primarily as a

     result of the improvement in rates;

    -- Net income of $56.6 million increased by $20.3 million versus net

     income for the six months ended September 30, 2006. Increases in

     operating income, foreign currency gains and earnings from

     unconsolidated affiliates contributed to the improvement in

     year-to-date net income.

    -- Diluted earnings per share increased to $1.87 from $1.52 for the same

     period in fiscal year 2007. Diluted earnings per share for the six

     months ended September 30, 2007 and 2006 reflected the assumed

     conversion of the Company's Mandatory Convertible Preferred Stock,

     which added approximately 6.5 million and 0.3 million shares,

     respectively, to the weighted average diluted shares calculation.

    -- Operating results for the six months ended September 30, 2007 included

     the following items:

     -- Reversal of $1.0 million of previously accrued SEC settlement costs.

     -- Reversal of a $5.4 million accrual for sales tax contingency in

     Nigeria.

    Excluding these items, operating income, operating margin, net income and diluted EPS would have been $74.1 million, 14.3%, $52.5 million and $1.73 per common share, respectively.

    Capital and Liquidity:

    -- The September 30, 2007 consolidated balance sheet reflected

     $942.3 million in stockholders' investment and $557.3 million of

     indebtedness;

    -- We had $276.4 million in cash and an undrawn $100 million revolving

     credit facility;

    -- We generated $43.5 million of cash from operating activities for the

     six months ended September 30, 2007. We also used $221.1 million for

     capital expenditures, primarily for aircraft, and $12.9 million for the

     acquisition (net of cash acquired) of Bristow Academy during the six

     months ended September 30, 2007;

    -- Aircraft purchase commitments totaled $276.5 million, with options

     totaling $608.0 million as of September 30, 2007.

    William E. Chiles, President and Chief Executive Officer of Bristow Group Inc., said, "We are very pleased with our strong financial performance and excellent execution against our strategic plan during the latest quarter. We continue to proceed with our plan to expand our fleet and we recently announced our decision to exercise options to acquire an additional four Sikorsky S-92(R) large helicopters and three Sikorsky S-76C++(TM) medium helicopters with a combined value of more than $100 million. All seven helicopters are expected to be delivered in late 2008.

    "We also remain on target with our plan to improve overall margins and operating efficiencies. We are systematically reviewing the profitability of our contracts and making a concerted effort to improve our return on capital, especially in Nigeria.

    "The industry fundamentals continue to be very strong, and our customers remain committed to field development plans, which are the primary drivers of our growth. We continue to believe demand for aircraft will exceed supply over the next several years, which should create good opportunities to enhance revenue and margin growth going forward."

    CONFERENCE CALL

    Management will conduct a conference call starting at 10:00 a.m. EST

    (9:00 a.m. CST) on Tuesday, November 6, 2007, to review financial results for the fiscal quarter ended September 30, 2007. 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 "Q2 2008 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) 257-1836

    -- Replay: A telephone replay will be available through November 20, 2007,

     by dialing toll free (800) 405-2236, passcode: 11099470#

    Via Telephone outside the U.S.:

    -- Live: Dial (303) 262-2139

    -- Replay: A telephone replay will be available through November 20, 2007

     by dialing (303) 590-3000, passcode: 11099470#

    ABOUT BRISTOW GROUP INC.

    Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated. Through its subsidiaries, affiliates and joint ventures, the Company has major transportation operations in the U.S. Gulf of Mexico and the North Sea, and in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, 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 customer demand, industry conditions, future results, revenue growth, margins, operating efficiency, rate of return, the addition of new aircraft to our fleet and aircraft delivery. 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 September 30, 2007 and the annual report on Form 10-K for the year ended March 31, 2007. 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.

    Contact:

    Joe Baj, VP & Treasurer

    (713) 267-7605

    Linda McNeill, Treasury Manager

    (713) 267-7622

     (financial tables follow)

     BRISTOW GROUP INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF INCOME

     (In thousands, except per share amounts)

     Three Months Ended Six Months Ended

     September 30, September 30,

     --------------------- ---------------------

     2006 2007 2006 2007

     --------- --------- --------- ---------

     (Unaudited)

    Gross revenue:

     Operating revenue from

     non-affiliates $191,341 $231,475 $373,127 $443,929

     Operating revenue

     from affiliates 11,631 13,858 23,710 24,955

     Reimbursable revenue

     from non-affiliates 20,091 25,505 46,216 45,853

     Reimbursable revenue

     from affiliates 1,146 2,498 2,218 3,601

     --------- --------- --------- ---------

     224,209 273,336 445,271 518,338

     --------- --------- --------- ---------

    Operating expense:

     Direct cost 148,872 162,764 287,341 326,600

     Reimbursable expense 20,879 25,793 47,778 47,034

     Depreciation and

     amortization 10,737 12,395 21,020 23,768

     General and

     administrative 16,527 21,039 31,876 40,301

     Loss (gain) on

     disposal of assets (3,667) 754 (4,665) 170

     --------- --------- --------- ---------

     193,348 222,745 383,350 437,873

     --------- --------- --------- ---------

     Operating income 30,861 50,591 61,921 80,465

    Earnings from

     unconsolidated

     affiliates, net

     of losses 1,728 4,118 3,287 7,508

    Interest income 1,069 4,049 2,359 6,247

    Interest expense (2,871) (6,523) (6,107) (9,456)

    Other income (expense),

     net (1,308) 360 (6,093) 786

     --------- --------- --------- ---------

     Income before

     provision for

     income taxes and

     minority interest 29,479 52,595 55,367 85,550

    Provision for income

     taxes (9,728) (18,641) (18,271) (28,475)

    Minority interest (676) (4) (792) (453)

     --------- --------- --------- ---------

     Net income 19,075 33,950 36,304 56,622

     Preferred stock

     dividends (321) (3,163) (321) (6,325)

     --------- --------- --------- ---------

     Net income available

     to common

     stockholders $18,754 $30,787 $35,983 $50,297

     ========= ========= ========= =========

    Earnings per common share:

     Basic $0.80 $1.30 $1.54 $2.13

     ========= ========= ========= =========

     Diluted $0.79 $1.12 $1.52 $1.87

     ========= ========= ========= =========

     BRISTOW GROUP INC. AND SUBSIDIARIES

     CONSOLIDATED BALANCE SHEETS

     (In thousands)

     March 31, September 30,

     2007 2007

     ------------- -------------

     (Unaudited)

     ASSETS

    Current assets:

     Cash and cash equivalents $184,188 $276,439

     Accounts receivable from non-affiliates 158,770 191,962

     Accounts receivable from affiliates 17,199 14,862

     Inventories 157,870 176,459

     Prepaid expenses and other 17,947 26,244

     ------------- -------------

     Total current assets 535,974 685,966

    Investment in unconsolidated affiliates 46,828 54,314

    Property and equipment - at cost:

     Land and buildings 51,850 55,619

     Aircraft and equipment 1,141,578 1,353,975

     ------------- -------------

     1,193,428 1,409,594

     Less - Accumulated depreciation

     and amortization (301,520) (309,726)

     ------------- -------------

     891,908 1,099,868

    Goodwill 20,368 29,302

    Other assets 10,725 29,793

     ------------- -------------

     $1,505,803 $1,899,243

     ============= =============

     LIABILITIES AND STOCKHOLDERS' INVESTMENT

    Current liabilities:

     Accounts payable $42,343 $49,055

     Accrued wages, benefits and related taxes 38,281 39,414

     Income taxes payable 4,377 9,489

     Other accrued taxes 9,084 5,118

     Deferred revenues 16,283 14,703

     Accrued maintenance and repairs 12,309 13,556

     Other accrued liabilities 22,828 27,167

     Deferred taxes 17,611 18,479

     Short-term borrowings and current

     maturities of long-term debt 4,852 6,764

     ------------- -------------

     Total current liabilities 167,968 183,745

    Long-term debt, less current maturities 254,230 550,571

    Accrued pension liabilities 113,069 112,121

    Other liabilities and deferred credits 17,345 15,312

    Deferred taxes 76,089 89,914

    Minority interest 5,445 5,258

    Commitments and contingencies

    Stockholders' investment:

     5.50% mandatory convertible preferred stock 222,554 222,554

     Common stock 236 237

     Additional paid-in capital 169,353 174,383

     Retained earnings 515,589 565,886

     Accumulated other comprehensive loss (36,075) (20,738)

     ------------- -------------

     871,657 942,322

     ------------- -------------

     $1,505,803 $1,899,243

     ============= =============

     BRISTOW GROUP INC. AND SUBSIDIARIES

     CORPORATE ITEMS AFFECTING THE COMPARABILITY OF RESULTS

     (In thousands, except per share amounts)

     (Unaudited)

     Three Months Ended September 30,

     --------------------------------------------------------

     2006 2007

     --------------------------- ---------------------------

     Diluted Diluted

     Earnings Earnings

     Pre-tax Net Per Pre-tax Net Per

     Earnings Income Share Earnings Income Share

     --------- ------- ------- -------- ------- --------

    Investigations:

     SEC (1) $- $- $- $1,000 $650 $0.02

     DOJ (2) (282) (183) (0.01) (488) (317) (0.01)

    Tax contingency

     related items (3) - 700 0.03 5,396 3,407 0.11

    7 1/2% Senior

     Notes due 2017 (4) - - - (2,248) (1,461) (0.05)

    Foreign currency

     transaction gains

     (losses) (5) (1,333) (867) (0.04) 334 217 0.01

    Preferred

     Stock (6) 291 189 (0.01) - - (0.30)

     --------- ------- ------- -------- ------- --------

    Total $(1,324) $(161) $(0.03) $3,994 $2,496 $(0.22)

     ========= ======= ======= ======== ======= ========

     Six Months Ended September 30,

     --------------------------------------------------------

     2006 2007

     --------------------------- ---------------------------

     Diluted Diluted

     Earnings Earnings

     Pre-tax Net Per Pre-tax Net Per

     Earnings Income Share Earnings Income Share

     --------- ------- ------- -------- ------- --------

    Investigations:

     SEC (1) $- $- $- $1,000 $650 $0.02

     DOJ (2) (873) (567) (0.02) (488) (317) (0.01)

    Tax contingency

     related items (3) - 1,500 0.06 5,396 4,407 0.15

    7 1/2% Senior

     Notes due 2017 (4) - - - (2,605) (1,693) (0.06)

    Foreign currency

     transaction gains

     (losses) (5) (6,142) (3,993) (0.17) 735 478 0.02

    Preferred

     Stock (6) 291 189 (0.01) 826 537 (0.50)

     --------- ------- ------- -------- ------- --------

    Total $(6,724) $(2,871) $(0.14) $4,864 $4,062 $(0.38)

     ========= ======= ======= ======== ======= ========

    (1) Represents a reversal of previously accrued costs incurred in

     conjunction with the SEC investigation regarding findings from the

     internal review initiated by the Audit Committee of our board of

     directors in fiscal year 2005 of certain payments made by two of our

     affiliated entities in a foreign country. These costs were included

     in general & administrative costs in our consolidated statements of

     income.

    (2) Represents legal and other professional fees incurred in connection

     with a document subpoena received from the Antitrust Division of the

     Department of Justice ("DOJ") in June 2005, which related to a grand

     jury investigation of potential antitrust violations among providers

     of helicopter transportation services in the U.S. Gulf of Mexico

     focusing on activities during the period from January 1, 2000 to

     June 13, 2005. These costs are included in general & administrative

     costs in our consolidated statements of income.

    (3) Represents $5.4 million in reversal of accrual for sales tax

     contingency during the three and six months ended September 30, 2007

     in Nigeria included in direct costs in our consolidated statements of

     income and a direct reduction in our provision for income taxes in our

     consolidated statements of income for income tax contingency items,

     which represents the remainder of the impact on net income and diluted

     earnings per share.

    (4) Represents the effect on interest expense, net of interest income from

     invested proceeds, resulting from the issuance of 7 1/2% Senior Notes

     due 2017 in June 2007.

    (5) Represents foreign currency transaction gains and losses resulting

     from changes in exchange rates during the applicable periods. The

     effects of these foreign currency transaction gains and losses were

     offset to a large extent by corresponding charges or benefits in the

     cumulative translation adjustment in stockholders' investment with no

     overall economic effect. These amounts are included in other income

     (expense), net in our consolidated statements of income.

    (6) Represents the effect of the preferred stock offering completed in

     September and October 2006. The net income effect results from

     interest income earned on remaining cash proceeds generated from the

     offering. Diluted earnings per share for the three and six months

     ended September 30, 2007 and 2006 was reduced by the effect of the

     inclusion of weighted average shares resulting from the assumed

     conversion of the preferred stock at the conversion rate that results

     in the most dilution, partially offset by the impact of higher

     interest income.

     BRISTOW GROUP INC. AND SUBSIDIARIES

     SELECTED OPERATING DATA

     (In thousands, except flight hours and percentages)

     Three Months Ended Six Months Ended

     September 30, September 30,

     --------------------- ---------------------

     2006 2007 2006 2007

     ---------- -------- ----------- --------

     (Unaudited)

    Flight hours (excludes

     Bristow Academy and

     unconsolidated affiliates):

     Helicopter Services:

     North America 41,148 39,623 83,757 79,894

     South and Central

     America 9,631 10,810 18,916 22,177

     Europe 10,685 11,494 20,855 22,315

     West Africa 9,179 9,887 18,062 18,785

     Southeast Asia 3,063 3,644 6,269 6,988

     Other International 2,426 2,177 4,478 4,724

     ---------- -------- ----------- --------

     Consolidated

     total 76,132 77,635 152,337 154,883

     ========== ======== =========== ========

    Gross revenue:

     Helicopter Services:

     North America $62,504 $62,059 $125,872 $122,998

     South and Central

     America 13,137 16,951 26,149 32,987

     Europe 72,706 93,459 144,687 176,816

     West Africa 31,210 45,799 62,946 79,082

     Southeast Asia 17,626 23,858 34,666 46,350

     Other International 12,184 12,046 21,139 23,501

     EH Centralized

     Operations 3,538 5,331 6,612 12,136

     Bristow Academy - 3,228 - 6,247

     Intrasegment

     eliminations (3,276) (3,005) (6,136) (9,240)

     ---------- -------- ----------- --------

     Total Helicopter

     Services 209,629 259,726 415,935 490,877

     Production Management

     Services 17,784 16,030 35,468 32,573

     Corporate - - (25) -

     Intersegment

     eliminations (3,204) (2,420) (6,107) (5,112)

     ---------- -------- ----------- --------

     Consolidated

     total $224,209 $273,336 $445,271 $518,338

     ========== ======== =========== ========

    Operating income:

     Helicopter Services:

     North America $7,107 $10,869 $16,340 $21,583

     South and Central

     America 3,624 4,573 7,594 8,258

     Europe 13,527 21,895 27,623 36,470

     West Africa 2,848 15,492 7,181 18,289

     Southeast Asia 3,210 5,107 5,645 9,234

     Other International 3,771 1,781 5,287 4,046

     EH Centralized

     Operations (2,584) (3,247) (4,351) (7,526)

     Bristow Academy - (391) - (482)

     ---------- -------- ----------- --------

     Total Helicopter

     Services 31,503 56,079 65,319 89,872

     Production Management

     Services 1,394 870 2,807 1,959

     Gain (loss) on

     disposal of assets 3,667 (754) 4,665 (170)

     Corporate (5,703) (5,604) (10,870) (11,196)

     ---------- -------- ----------- --------

     Consolidated

     total $30,861 $50,591 $61,921 $80,465

     ========== ======== =========== ========

    Operating margin:

     Helicopter Services:

     North America 11.4% 17.5% 13.0% 17.5%

     South and Central

     America 27.6% 27.0% 29.0% 25.0%

     Europe 18.6% 23.4% 19.1% 20.6%

     West Africa 9.1% 33.8% 11.4% 23.1%

     Southeast Asia 18.2% 21.4% 16.3% 19.9%

     Other International 31.0% 14.8% 25.0% 17.2%

     EH Centralized

     Operations (73.0)% (60.9)% (65.8)% (62.0)%

     Bristow Academy N/A (12.1)% N/A (7.7)%

     Total Helicopter

     Services 15.0% 21.6% 15.7% 18.3%

     Production Management

     Services 7.8% 5.4% 7.9% 6.0%

     Consolidated total 13.8% 18.5% 13.9% 15.5%
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