Bristow Group Posts Financial Results for Fiscal Year 2009



Bristow Group has reported financial results for the fiscal year 2009 fourth quarter and year-ended March 31, 2009.

Highlights

For the March 2009 quarter:

  • Revenue increased 6% versus the March 2008 quarter to $275.0 million. Revenue improvements occurred across most of our business units, but most significantly in our Europe, West Africa and Latin America business units. These were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Bristow Norway (formerly Norsk Helikopters AS), our Norwegian affiliate, effective October 31, 2008.
  • Operating income increased 28% to $42.9 million from $33.5 million in the March 2008 quarter.
  • Income from continuing operations was unchanged at $26.3 million for the March 2009 and 2008 quarters.
  • Diluted earnings per share from continuing operations decreased to $0.74 from $0.86 in the March 2008 quarter. Diluted earnings per share for the March 2009 and 2008 quarters reflect the assumed conversion of our Mandatory Convertible Preferred Stock, which will convert to our common shares in September 2009 and added approximately 6.5 million shares to our weighted-average share count in both quarters. Primarily as a result of our June 2008 offering, the weighted-average share count rose by 17% in the March 2009 quarter compared to the same period a year ago.

Our results for the March 2009 quarter were unfavorably impacted by the strengthening U.S. dollar versus certain foreign currencies. The changes in foreign currency exchange rates resulted in a decrease in our operating income of $6.3 million, income from continuing operations of $4.9 million and diluted earnings per share of $0.14. Excluding the impact of changes in foreign currency exchange rates, diluted earnings per share from continuing operations would have been $0.88 for the March 2009 quarter.

The March 2009 quarter also included the following significant items:

  • The net reduction in expense in Australia, part of our Southeast Asia business unit, upon resolution of a local tax matter, which was partially offset by expense recorded for other local tax matters. These items collectively resulted in an increase in operating income of $1.3 million, income from continuing operations of $0.8 million and diluted earnings per share of $0.02.
  • A reduction in maintenance expense in our Eastern Hemisphere ("EH") Centralized Operations business unit associated with a credit resulting from the renegotiation of a "power by the hour" (PBH) contract for aircraft maintenance with a third party provider, which increased operating income by $6.8 million, income from continuing operations by $4.4 million and diluted earnings per share by $0.12.
  • An increase in our overall effective tax rate to 35.0% resulting from a one time provision for potential foreign taxes and a settlement of tax contingencies related to certain foreign income taxes, which decreased income from continuing operations by $4.7 million and diluted earnings per share by $0.13.

Excluding the impact of these significant items, diluted earnings per share from continuing operations would have been $0.73 for the March 2009 quarter.

Financial results for the March 2008 quarter included:

  • Costs in our Other International business unit related to a claim by a former agent, whom we terminated in connection with an internal review, that decreased operating income by $4.5 million, income from continuing operations by $2.9 million and diluted earnings per share by $0.10.
  • A $4.5 million decrease in equity in earnings of Bristow Norway. The lower level of equity earnings from Bristow Norway decreased income from continuing operations by $2.9 million and diluted earnings per share by $0.10.
  • Retirement related expenses for two of our corporate officers that decreased operating income by $1.9 million, income from continuing operations by $1.2 million and diluted earnings per share by $0.04.
  • Tax items that increased operating income by $2.9 million, income from continuing operations by $7.9 million and diluted earnings per share by $0.26.

Excluding these items, diluted earnings per share from continuing operations would have been $0.84 for the March 2008 quarter.

For the fiscal year ended March 31, 2009:

  • Revenue increased 12% versus the fiscal year ended March 31, 2008 to $1.1 billion. Revenue increased for all of our business units, but most significantly in our Europe, West Africa, Southeast Asia and Latin America business units. These revenue increases were driven in large part by increases in rates, the addition of new aircraft and the consolidation of Bristow Norway.
  • Operating income increased 27% to $188.6 million from $148.7 million for the prior fiscal year.
  • Income from continuing operations increased 16% to $124.6 million from $107.8 million for the prior fiscal year.
  • Diluted earnings per share from continuing operations increased to $3.61 from $3.53 a year ago. Diluted earnings per share for the fiscal years ended March 31, 2009 and 2008 reflect the assumed conversion of our Mandatory Convertible Preferred Stock, which will convert to our common shares in September 2009 and added approximately 6.5 million shares to our weighted-average share count in both fiscal years. Primarily as a result of our June 2008 offering, the weighted-average share count rose by 13% in the fiscal year ended March 31, 2009 compared to the prior fiscal year.
  • As was the case for the March 2009 quarter, results for the fiscal year ended March 31, 2009 were unfavorably impacted by the strengthening U.S. dollar. The changes in foreign currency exchange rates resulted in a decrease in our operating income of $12.0 million, income from continuing operations of $9.2 million and diluted earnings per share of $0.27. Excluding the impact of changes in foreign currency exchange rates, diluted earnings per share from continuing operations would have been $3.88 for the fiscal year ended March 31, 2009.

The fiscal year ended March 31, 2009 also included the following significant 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 $36.2 million, income from continuing operations by $23.4 million and diluted earnings per share by $0.68.
  • The impact of hurricanes in the U.S. Gulf of Mexico during the fiscal year ended March 31, 2009, which resulted in a decrease in flight activity and an increase in costs, which reduced operating income by $2.4 million, income from continuing operations by $2.0 million and diluted earnings per share by $0.06.
  • The April 2008 restructuring of our ownership interests in affiliates in Mexico, part of our Latin America business unit, which resulted in an increase in operating income of $0.8 million, income from continuing operations of $3.7 million and diluted earnings per share of $0.11.
  • The recognition of expense in Australia, part of our Southeast Asia business unit, related to local tax matters, increases in compensation costs retroactive to prior fiscal years and one time costs associated with introducing new aircraft into this market and moving aircraft within this market, which resulted in a reduction in operating income of $4.1 million, income from continuing operations of $2.9 million and diluted earnings per share of $0.08.
  • A reduction in maintenance expense in our EH Centralized Operations business unit associated with the PBH contract credit mentioned above, which increased operating income by $6.8 million, income from continuing operations by $4.8 million and diluted earnings per share by $0.14.

Excluding the impact of these significant items, diluted earnings per share from continuing operations would have been $2.82 for the fiscal year ended March 31, 2009.

In addition to the costs associated with termination of an agent and retirement of two of our corporate officers discussed above, financial results for the fiscal year ended March 31, 2008 included tax items that increased operating income by $8.3 million, income from continuing operations by $11.4 million and diluted earnings per share by $0.37.

Excluding these items, diluted earnings per share from continuing operations would have been $3.31 for the fiscal year ended March 31, 2008.

Capital and Liquidity

At March 31, 2009, key balance sheet items and capital commitments were:

  • $1.2 billion in stockholders' investment and $746 million of indebtedness,
  • $301 million in cash and a $100 million undrawn revolving credit facility, and
  • Aircraft purchase commitments totaled $245 million for 24 aircraft.

During the fiscal year ended March 31, 2009, key cash flow items were:

  • $128 million of cash from operating activities,
  • $102 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, and
  • $455 million used on capital expenditures - primarily for aircraft - and $17 million for acquisitions.

CEO Remarks

"We are pleased with both our fiscal fourth quarter and year-end results. Despite the challenging economic environment throughout the year, and the significant decline in energy prices during the second half, 2009 was a record year for Bristow in terms of revenue and net income. In the fourth quarter, we continued to experience good activity levels, particularly in Nigeria, the North Sea, Mexico and Brazil. This was driven by stable 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.

"The demand for our services has been negatively affected by lower E&P spending, but we are less affected than other oil service companies because of our production focus, fleet size and our geographic and customer diversity. To date we've been able to maintain our pricing structure in this challenging environment.

"We believe we have the liquidity and financial flexibility to weather this uncertain operating environment and the ability to take advantage of attractive investment opportunities which may arise," Chiles concluded.

 


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