Bristow Group's Posts Fiscal 2010 First Quarter Results
Bristow Group has reported financial results for its fiscal 2010 first quarter ended June 30, 2009.
- Revenue of $290.5 million, an increase of 2% from the June 2008 quarter and 6% from the March 2009 quarter.
- Operating income of $44.8 million, an increase of 14% from the June 2008 quarter and a decrease of 6% from the March 2009 quarter.
- Net income of $23.7 million, a 5% increase from the June 2008 quarter and an 8% decrease from the March 2009 quarter.
- Diluted earnings per share of $0.66, a decrease versus the June 2008 and March 2009 quarters.
- Net cash generated by operating activities was $35 million in the June 2009 quarter.
- On May 26, 2009, we acquired a 42.5% interest in Lider Aviacao Holding S.A. ("Lider"), the largest provider of helicopter services in Brazil, which contributed $1.3 million to operating income in the June 2009 quarter.
Our results for the June 2009 quarter were impacted by following significant items:
- An increase in severance costs primarily driven by the departure of an executive officer that resulted in decreases in operating income of $4.2 million, net income of $3.0 million and diluted earnings per share of $0.08.
- Earnings recognized from our investment in Lider that increased operating income by $1.3 million, net income by $0.9 million and diluted earnings per share by $0.03.
- Changes in foreign currency exchange rates, which when compared to rates in the June 2008 quarter resulted in decreases in revenue of $35.0 million, operating income of $3.0 million, net income of $3.5 million and diluted earnings per share of $0.10, and when compared to rates in the March 2009 quarter resulted in increases in revenue of $10.8 million and operating income of $2.6 million, but had little impact on net income and diluted earnings per share.
Items that occurred in the June 2008 quarter which affect the comparability of our financial results include:
- The reorganization of our operations in Mexico that increased operating income by $4.4 million, net income by $3.7 million and diluted earnings per share by $0.12.
- An increase in Australia's compensation costs due to adjustments in employee tax and leave accruals relating to prior periods that resulted in a decrease of operating income of $1.3 million, net income of $0.9 million and diluted earnings per share of $0.03.
- Inventory charges in the Eastern Hemisphere ("EH") Centralized Operations business unit that decreased operating income by $2.0 million, net income by $1.4 million and diluted earnings per share by $0.04.
Items that occurred in the March 2009 quarter which affect the comparability of our financial results include:
- The net reduction in expense in Australia 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, net income of $0.8 million and diluted earnings per share of $0.02.
- A reduction in maintenance expense in our EH Centralized Operations business unit associated with a credit resulting from the renegotiation of a "power by the hour" contract for aircraft maintenance with a third party provider, which increased operating income by $6.8 million, net income 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 net income by $4.7 million and diluted earnings per share by $0.13.
Capital and Liquidity
At June 30, 2009, key balance sheet items, capital commitments and liquidity sources were:
- $1.3 billion in stockholders' investment and $724 million of indebtedness.
- $138 million in cash and a $100 million undrawn revolving credit facility.
- $169 million in aircraft purchase commitments for 17 aircraft.
"Despite the current global economic situation and the impact on our industry, we are pleased with our June 2009 quarter results as we continue to experience good activity levels in a number of markets including Nigeria, the North Sea and Brazil. In Nigeria, activity levels continue to be strong despite a challenging political environment. In the North Sea, results were strong due to a temporary increase in ad hoc flying and other short-term contracts, as well as improved margins for Bristow Norway. In Brazil, our fiscal first quarter results included a contribution from our recent investment in Lider. Our results for the U.S. Gulf of Mexico were comparable to the March 2009 quarter, and were not impacted to the degree that other service companies have experienced. This is driven by our efforts to retain stable pricing and upgrade our fleet to larger, more efficient and more profitable aircraft," said William E. Chiles, President and Chief Executive Officer of Bristow Group.
"We continue to operate in a challenging economic and industry environment with significant volatility in energy prices, which has a direct impact on our customers' activity levels and translates into uncertainty in our business. However, we believe we are properly positioned and have the liquidity and financial flexibility to weather this uncertain market," Chiles concluded.
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