Bristow Group Reports First Quarter Fiscal Year 2018 Results
HOUSTON, Aug. 3, 2017 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported the following results for the three months ended June 30, 2017. All amounts shown are dollar amounts in thousands unless otherwise noted:
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
Operating
revenue $339,729 $356,184 (4.6)%
Net loss
attributable to
Bristow Group (55,275) (40,772) (35.6)%
Diluted loss per
share (1.57) (1.17) (34.2)%
Adjusted EBITDA
(1) 15,203 19,080 (20.3)%
Adjusted net
loss (1) (29,138) (12,008) (142.7)%
Adjusted diluted
loss per share
(1) (0.83) (0.34) (144.1)%
Operating cash
flow (51,179) (14,828) (245.2)%
Capital
expenditures 12,553 21,063 (40.4)%
Rent expense 58,675 51,283 14.4%
June 30, March 31, % Change
2017 2017
---- ----
Cash $78,879 $96,656 (18.4)%
Undrawn
borrowing
capacity on
Revolving
Credit Facility 214,129 260,320 (17.7)%
------- -------
Total liquidity $293,008 $356,976 (17.9)%
======== ========
(1) A full reconciliation of non-GAAP
financial measurements is
included at the end of this news
release.
For the June 2017 quarter, we reported a GAAP net loss of $55.3 million and diluted loss per share of $1.57 compared to a GAAP net loss of $40.8 million and diluted loss per share of $1.17 for the June 2016 quarter. Additionally, we reported an adjusted net loss of $29.1 million and adjusted diluted loss per share of $0.83 for the June 2017 quarter compared to adjusted net loss of $12.0 million and adjusted diluted loss per share of $0.34 for the June 2016 quarter.
BUSINESS AND FINANCIAL UPDATE
-- Our June 2017 quarter adjusted EBITDA was better than our internal
expectations as a result of higher revenue primarily from increased
activity levels in Europe and Africa, and reduced expenses from the
actions taken during the quarter, which included the reversal of $8.0
million in previously accrued annual and long-term incentive bonuses and
reduced corporate salary and professional fee expenses.
-- We had $293.0 million of total liquidity as of June 30, 2017 with
negative operating cash flow during the quarter driven primarily by
working capital changes from the timing of receivable collections, and
interest and severance payments being only partially offset by $40
million in proceeds from the sale of a SAR S-92.
-- In July 2017, we entered into a $230 million Credit Agreement that is
currently expected to fund on or before August 30, 2017. We anticipate
an improved fiscal year 2018 liquidity outlook reflecting the benefit of
actions taken in fiscal year 2018, including cost reductions and the
suspension of our $2.5 million quarterly dividend.
-- Our expectations for fiscal year 2018 full year operating results remain
largely consistent with our May 2017 guidance with the bonus accrual
benefit not expected to recur.
"While our first quarter financial performance continues to reflect the difficult environment in the offshore oil and gas industry, I am incredibly proud that our teams delivered safe operations and a more competitive and cost efficient service for our clients as a result of aggressive actions taken during the quarter," said Jonathan Baliff, President and Chief Executive Officer of Bristow Group.
"Even with the better-than-expected first quarter performance, we expect the full fiscal 2018 operating results to be largely consistent with our May 2017 guidance as the current downturn persists with low offshore oil and gas activity levels. However, since the beginning of this fiscal year, we have taken several actions designed to significantly strengthen our liquidity. We sold a SAR S-92 for approximately $40 million, announced an agreement for a secured financing of $230 million, and therefore anticipate an improved fiscal 2018 liquidity outlook."
"We remain committed to our four fiscal 2018 priorities for the New Bristow. One, safety improvement remains Bristow's top priority while; two, continuing to improve efficiency with G&A expenses expected to decrease to approximately 12% of revenues; three, further optimizing our portfolio and our fleet, recovering costs incurred as a result of the actions of original equipment manufacturers (OEMs) while reducing or deferring capital expenditures; and four, growing revenue as we better serve our clients in our Europe and Americas Hubs."
Operating revenue from external clients by line of service was as follows:
Three Months Ended June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Oil
and
gas
services $234,775 $253,087 (7.2)%
Fixed
wing
services 50,677 50,617 0.1%
U.K.
SAR
services 52,587 49,549 6.1%
Corporate
and
other 1,690 2,931 (42.3)%
----- -----
Total
operating
revenue $339,729 $356,184 (4.6)%
======== ========
The year-over-year decrease in revenue was driven by lower oil and gas activity levels and an unfavorable impact from changes in foreign currency exchange rates compared to the June 2016 quarter of $18.8 million, which related mostly to the depreciation in the British pound sterling. The decline in oil and gas services revenue was partially offset by the increase in U.K. SAR services revenue due to additional bases coming online in fiscal years 2017 and 2018.
The year-over-year change in net loss and diluted loss per share was primarily driven by the decline in oil and gas revenue discussed above, higher income tax, rent and interest expense, lower earnings from unconsolidated affiliates and an inventory impairment charge recorded in the June 2017 quarter. These unfavorable changes were partially offset by higher impairment of asset charges recorded in the June 2016 quarter, a decrease in general and administrative expense and direct costs primarily from lower salaries and benefits and lower depreciation and amortization expense due to accelerated depreciation recorded in the June 2017 quarter. The year-over-year impact of changes in foreign currency exchange rates on revenue was offset by a positive impact on operating expenses and lower transaction losses compared to the June 2016 quarter.
The GAAP net loss and diluted loss per share for the June 2017 quarter included the following special items:
-- Organizational restructuring costs of $9.7 million ($6.6 million net of
tax) included in general and administrative expense, which includes
severance expense of $8.7 million related to separation programs across
our global organization designed to increase efficiency and reduce costs
and other restructuring costs of $1.0 million,
-- Impairment of inventories of $1.2 million ($0.8 million net of tax)
included in loss on impairment, and
-- Tax items of $14.9 million that include non-cash adjustments related to
the ongoing impact of valuation of deferred tax assets of $13.9 million
and a one-time non-cash tax effect from repositioning of certain
aircraft from one tax jurisdiction to another related to recent
financing transactions resulting in additional income tax expense of
$1.0 million.
The June 2016 quarter was impacted by similar items as reflected in the table at the end of this release.
Excluding the effect of these special items, the year-over-year increase in adjusted net loss and diluted earnings per share and decrease in adjusted EBITDA was primarily driven by the decline in oil and gas revenue, higher adjusted income tax expense, higher rent expense and lower earnings from unconsolidated affiliates.
DIVIDEND, LIQUIDITY AND FINANCIAL FLEXIBILITY
In August 2017, the Board of Directors voted to suspend our quarterly dividend as part of our fiscal 2018 priorities. By suspending what had been a $0.07 per share quarterly dividend, we will preserve approximately $10 million of cash annually.
Our total liquidity decreased approximately $64 million to $293 million as of June 30, 2017 primarily due to cash used in operations of $51.2 million, including negative working capital changes of $32.1 million as well as principal debt repayments of $33.5 million, partially offset by proceeds from asset dispositions of $42.0 million. We expect ending total liquidity as of March 31, 2018 to be between $225 million and $265 million, which is higher than we forecasted in May 2017 as we continue to take actions to reduce cost, manage working capital and leverage our asset portfolio.
"The actions we have taken over the past two years were designed to strengthen our financial position and further extend our liquidity runway as we work through this generational downturn," said Don Miller, Senior Vice President and Chief Financial Officer. "Our focused effort on continued cost reductions, including the return of expiring leased aircraft and working capital reductions, are expected to improve our liquidity as we navigate through this challenging market environment."
REGIONAL PERFORMANCE
--------------------
Europe Caspian
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating revenue $184,478 $189,128 (2.5)%
Earnings from
unconsolidated
affiliates $30 $51 (41.2)%
Operating income $4,407 $13,030 (66.2)%
Operating margin 2.4% 6.9% (65.2)%
Adjusted EBITDA $16,152 $17,599 (8.2)%
Adjusted EBITDA
margin 8.8% 9.3% (5.4)%
Rent expense $36,453 $32,288 12.9%
The year-over-year decrease in operating revenue was primarily driven by the unfavorable impact of foreign currency exchange rates during the June 2017 quarter of $18.0 million, partially offset by an increase in operating revenue driven by the start-up of U.K. SAR bases since the June 2016 quarter and an additional contract in Norway. Eastern Airways contributed $27.9 million and $30.9 million in operating revenue and $0.1 million and $1.5 million in adjusted EBITDA for the June 2017 and June 2016 quarters, respectively.
Excluding the impact of foreign currency exchange rate changes, operating margin and adjusted EBITDA margin, would have been 3.0% and 9.6% in the June 2017 quarter compared to 5.5% and 11.5% in the June 2016 quarter, respectively. Operating margin and adjusted EBITDA margin, excluding the impact of foreign currency exchange rate changes, decreased from the June 2016 quarter as a result of the impact from the downturn in the offshore energy market, which was only partially offset by the start-up of the U.K. SAR bases and cost reduction activities.
Africa
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $49,981 $53,124 (5.9)%
Operating
income $10,048 $1,571 539.6%
Operating
margin 20.1% 3.0% 570.0%
Adjusted
EBITDA $13,383 $6,772 97.6%
Adjusted
EBITDA
margin 26.8% 12.7% 111.0%
Rent
expense $2,200 $2,268 (3.0)%
Operating revenue for Africa decreased for the June 2017 quarter due to an overall decrease in helicopter activity compared to the June 2016 quarter. We began providing fixed wing services in Africa which generated $1.8 million of operating revenue for the June 2017 quarter which partially offset the decline in helicopter activity.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin increased in the June 2017 quarter primarily due to a decline in direct costs driven by cost management efforts and the benefit of the devalued Nigerian naira, partially offset by the decrease in revenue discussed above. Operating income and operating margin also benefited from lower depreciation expense compared to the June 2016 quarter; we recorded $2.8 million of accelerated depreciation expense in the June 2016 quarter related to aircraft where management made the decision to exit model types earlier than originally anticipated. The year-over-year devaluation of the Nigerian naira benefited our regional results by $2.0 million as expenses denominated in naira translated into fewer U.S. dollars for reporting purposes.
Americas
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating revenue $57,783 $58,754 (1.7)%
Earnings from
unconsolidated
affiliates $(535) $3,863 (113.8)%
Operating income $(1,256) $921 (236.4)%
Operating margin (2.2)% 1.6% (237.5)%
Adjusted EBITDA $6,176 $14,036 (56.0)%
Adjusted EBITDA
margin 10.7% 23.9% (55.2)%
Rent expense $6,994 $5,562 25.7%
Operating revenue was slightly lower for the June 2017 quarter compared to the June 2016 quarter primarily due to the decline in medium and large aircraft activity in our U.S. Gulf of Mexico operations, a decrease in revenue in Trinidad and a decrease in revenue in Brazil; no aircraft were leased to Líder during the June 2017 quarter. These decreases were mostly offset by a new contract in Guyana and additional revenue from the search and rescue consortium in the U.S. Gulf of Mexico.
Earnings from unconsolidated affiliates decreased $4.4 million year-over-year primarily due to a decrease in earnings from our investment in Líder in Brazil. Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were negatively impacted by this decrease in earnings from Líder, which included an unfavorable exchange rate impact of $1.1 million year-over-year.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin decreased primarily due to the decrease in earnings from unconsolidated affiliates and revenue and an increase in lease costs. Operating income and operating margin benefited from lower depreciation expense compared to the June 2016 quarter; we recorded $3.9 million of accelerated depreciation expense in the June 2016 quarter related to aircraft where management made the decision to exit model types earlier than originally anticipated.
Asia Pacific
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $49,127 $55,232 (11.1)%
Operating
loss $(12,530) $(5,893) (112.6)%
Operating
margin (25.5)% (10.7)% (138.3)%
Adjusted
EBITDA $(5,720) $(3,123) (83.2)%
Adjusted
EBITDA
margin (11.6)% (5.7)% (103.5)%
Rent
expense $10,954 $9,284 18.0%
Operating revenue decreased for the June 2017 quarter compared to the June 2016 quarter primarily due to the ending of short-term contracts, partially offset by an increase in revenue from our fixed-wing operations at Airnorth. Airnorth contributed $21.0 million and $19.7 million in operating revenue and $0.9 million and $3.5 million in adjusted EBITDA for the June 2017 and June 2016 quarters, respectively.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin decreased in the June 2017 quarter primarily due to decreased revenue and an increase in lease costs, which was only partially offset by a decrease in salaries and benefits. Additionally, operating income and operating margin in the June 2017 quarter were negatively impacted by an increase in depreciation and amortization expense.
Corporate and other
Three Months Ended
June 30,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $1,712 $3,177 (46.1)%
Earnings
from
unconsolidated
affiliates $(160) $(84) (90.5)%
Operating
loss $(25,957) $(25,847) (0.4)%
Adjusted
EBITDA $(14,788) $(16,204) 8.7%
Rent
expense $2,074 $1,881 10.3%
Operating revenue decreased for the June 2017 quarter primarily due to a decline in Bristow Academy revenue.
Adjusted EBITDA improved primarily due to overall cost reduction activities that decreased general and administrative expenses, partially offset by a decline in revenue discussed above. In addition to the items impacting adjusted EBITDA, operating loss for the June 2017 quarter was impacted by $1.2 million of inventory impairment charges.
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 Friday, August 4, 2017 to review financial results for the fiscal year 2018 first quarter ended June 30, 2017. 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 First 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
-- Replay: A telephone replay will be available through August 18, 2017 and
may be accessed by calling toll free 1-877-660-6853, passcode: 13665035#
Via Telephone outside the U.S.:
-- Live: Dial 1-412-902-0030
-- Replay: A telephone replay will be available through August 18, 2017 and
may be accessed by calling 1-201-612-7415, passcode: 13665035#
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 and training, to government and civil organizations worldwide. Bristow has major 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, 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 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.
News Release
Linda McNeill
Investor Relations
(713) 267-7622
(financial tables follow)
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and percentages)
(Unaudited)
Three Months Ended
June 30,
2017 2016
---- ----
Gross revenue:
Operating revenue from non-
affiliates $322,118 $338,675
Operating revenue from
affiliates 17,611 17,509
Reimbursable revenue from
non-affiliates 12,380 13,214
------ ------
352,109 369,398
Operating expense:
Direct cost 285,551 289,543
Reimbursable expense 12,226 12,614
Depreciation and
amortization 31,056 34,694
General and administrative 46,707 52,595
------ ------
375,540 389,446
Loss on impairment (1,192) -
Gain (loss) on disposal of
assets 699 (10,017)
Earnings from
unconsolidated affiliates,
net of losses (665) 3,830
---- -----
Operating loss (24,589) (26,235)
Interest expense, net (16,021) (10,886)
Other income (expense), net (1,645) (6,189)
------ ------
Loss before provision for
income taxes (42,255) (43,310)
(Provision) benefit for
income taxes (13,491) 2,238
------- -----
Net loss (55,746) (41,072)
Net loss attributable to
noncontrolling interests 471 300
Net loss attributable to
Bristow Group $(55,275) $(40,772)
======== ========
Loss per common share:
Basic $(1.57) $(1.17)
Diluted $(1.57) $(1.17)
Non-GAAP measures:
Adjusted EBITDA $15,203 $19,080
Adjusted EBITDA margin 4.5% 5.4%
Adjusted net loss $(29,138) $(12,008)
Adjusted diluted loss per
share $(0.83) $(0.34)
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, March 31,
2017 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $78,879 $96,656
Accounts receivable from
non-affiliates 218,413 198,129
Accounts receivable from
affiliates 13,302 8,786
Inventories 130,479 124,911
Assets held for sale 34,585 38,246
Prepaid expenses and other
current assets 43,145 41,143
------ ------
Total current assets 518,803 507,871
Investment in
unconsolidated affiliates 205,174 210,162
Property and equipment - at cost:
Land and buildings 235,270 231,448
Aircraft and equipment 2,605,978 2,622,701
--------- ---------
2,841,248 2,854,149
Less - Accumulated
depreciation and
amortization (630,223) (599,785)
-------- --------
2,211,025 2,254,364
Goodwill 19,907 19,798
Other assets 115,921 121,652
------- -------
Total assets $3,070,830 $3,113,847
========== ==========
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $96,498 $98,215
Accrued wages, benefits and
related taxes 53,288 59,077
Income taxes payable 15,802 15,145
Other accrued taxes 8,383 9,611
Deferred revenue 22,318 19,911
Accrued maintenance and
repairs 25,628 22,914
Accrued interest 5,702 12,909
Other accrued liabilities 48,376 46,679
Deferred taxes - 830
Short-term borrowings and
current maturities of
long-term debt 117,817 131,063
------- -------
Total current liabilities 393,812 416,354
Long-term debt, less
current maturities 1,174,749 1,150,956
Accrued pension liabilities 60,057 61,647
Other liabilities and
deferred credits 25,634 28,899
Deferred taxes 159,439 154,873
Redeemable noncontrolling
interest 6,349 6,886
Stockholders' investment:
Common stock 380 379
Additional paid-in capital 813,857 809,995
Retained earnings 934,166 991,906
Accumulated other
comprehensive loss (318,207) (328,277)
Treasury shares (184,796) (184,796)
-------- --------
Total Bristow Group
stockholders' investment 1,245,400 1,289,207
Noncontrolling interests 5,390 5,025
----- -----
Total stockholders'
investment 1,250,790 1,294,232
--------- ---------
Total liabilities,
redeemable noncontrolling
interest and stockholders'
investment $3,070,830 $3,113,847
========== ==========
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2017 2016
---- ----
Cash flows from operating
activities:
Net loss $(55,746) $(41,072)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Depreciation
and
amortization 31,056 34,694
Deferred
income
taxes 6,651 (7,216)
Discount
amortization
on long-
term debt 23 27
Gain
(loss) on
disposal
of assets (699) 10,017
Loss on
impairment 1,192 -
Stock-
based
compensation 4,136 4,200
Equity in
earnings
from
unconsolidated
affiliates
less than
(in
excess
of)
dividends
received 665 (3,587)
Increase (decrease) in cash
resulting from changes in:
Accounts
receivable (21,541) (18,391)
Inventories (3,551) (2,000)
Prepaid
expenses
and other
assets 5,106 (2,390)
Accounts
payable (3,288) 5,328
Accrued
liabilities (8,807) 10,904
Other
liabilities
and
deferred
credits (6,376) (5,342)
------ ------
Net cash
used in
operating
activities (51,179) (14,828)
Cash flows from investing
activities:
Capital
expenditures (12,553) (21,063)
Proceeds
from
asset
dispositions 41,975 11,500
Net cash
provided
by (used
in)
investing
activities 29,422 (9,563)
Cash flows from financing
activities:
Proceeds
from
borrowings 69,018 74,408
Debt
issuance
costs (493) (2,925)
Repayment
of debt (66,947) (18,035)
Partial
prepayment
of put/
call
obligation (12) (13)
Payment of
contingent
consideration - (10,000)
Common
stock
dividends
paid (2,465) (2,453)
Repurchases
for tax
withholdings
on
vesting
of equity
awards (274) (570)
---- ----
Net cash
provided
by (used
in)
financing
activities (1,173) 40,412
Effect of
exchange
rate
changes
on cash
and cash
equivalents 5,153 2,380
----- -----
Net
increase
(decrease)
in cash
and cash
equivalents (17,777) 18,401
Cash and
cash
equivalents
at
beginning
of period 96,656 104,310
------ -------
Cash and
cash
equivalents
at end of
period $78,879 $122,711
======= ========
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Ended
June 30,
2017 2016
---- ----
Flight hours (excluding Bristow Academy and
unconsolidated affiliates):
Europe Caspian 22,147 22,144
Africa 7,523 8,072
Americas 7,692 6,210
Asia Pacific 6,361 6,711
Consolidated 43,723 43,137
====== ======
Operating revenue:
Europe Caspian $184,478 $189,128
Africa 49,981 53,124
Americas 57,783 58,754
Asia Pacific 49,127 55,232
Corporate and other 1,712 3,177
Intra-region eliminations (3,352) (3,231)
Consolidated $339,729 $356,184
======== ========
Operating income (loss):
Europe Caspian $4,407 $13,030
Africa 10,048 1,571
Americas (1,256) 921
Asia Pacific (12,530) (5,893)
Corporate and other (25,957) (25,847)
Gain (loss) on disposal of assets 699 (10,017)
Consolidated $(24,589) $(26,235)
======== ========
Operating margin:
Europe Caspian 2.4% 6.9%
Africa 20.1% 3.0%
Americas (2.2)% 1.6%
Asia Pacific (25.5)% (10.7)%
Consolidated (7.2)% (7.4)%
Adjusted EBITDA:
Europe Caspian $16,152 $17,599
Africa 13,383 6,772
Americas 6,176 14,036
Asia Pacific (5,720) (3,123)
Corporate and other (14,788) (16,204)
Consolidated $15,203 $19,080
======= =======
Adjusted EBITDA margin:
Europe Caspian 8.8% 9.3%
Africa 26.8% 12.7%
Americas 10.7% 23.9%
Asia Pacific (11.6)% (5.7)%
Consolidated 4.5% 5.4%
Three Months Ended
June 30,
2017 2016
---- ----
Depreciation and amortization:
Europe Caspian $11,822 $11,189
Africa 3,076 5,453
Americas 6,999 11,381
Asia Pacific 5,810 4,236
Corporate and other 3,349 2,435
Consolidated $31,056 $34,694
======= =======
Rent expense:
Europe Caspian $36,453 $32,288
Africa 2,200 2,268
Americas 6,994 5,562
Asia Pacific 10,954 9,284
Corporate and other 2,074 1,881
----- -----
Consolidated $58,675 $51,283
======= =======
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
As of June 30, 2017
(Unaudited)
Percentage Aircraft in Consolidated Fleet
of Current
Quarter
Operating
Revenue
-------
Helicopters Fixed Unconsolidated
Wing Affiliates (3)
---- -------------
Small Medium Large Training Total
(1)(2) Total
----- ------ ----- -------- ------ -----
Europe
Caspian 54% - 16 78 - 31 125 - 125
Africa 15% 9 31 5 - 5 50 46 96
Americas 17% 14 41 17 - - 72 67 139
Asia
Pacific 14% 2 10 23 - 14 49 - 49
Corporate
and other - % - - - 48 - 48 - 48
--- --- --- --- --- --- --- --- --- ---
Total 100% 25 98 123 48 50 344 113 457
=== === === === === === === === ===
Aircraft not currently
in fleet: (4)
On order - 2 27 - - 29
Under option - - 4 - - 4
(1) Eastern Airways operates a
total of 31 fixed wing
aircraft in the Europe
Caspian region and provides
technical support for 3
fixed wing aircraft in the
Africa region. Additionally,
Airnorth operates a total of
14 fixed wing aircraft,
which are included in the
Asia Pacific region.
(2) Includes 14 aircraft held for
sale and 121 leased aircraft
as follows:
Held for Sale Aircraft in Consolidated Fleet
Helicopters
Small Medium Large Training Fixed Total
Wing
----
Europe
Caspian - 2 - - - 2
Africa - 4 - - - 4
Americas - 5 - - - 5
Asia
Pacific - - - - 1 1
Corporate
and other - - - 2 - 2
Total - 11 - 2 1 14
=== === === === === ===
Leased Aircraft in Consolidated Fleet
Helicopters
Small Medium Large Training Fixed Total
Wing
----
Europe
Caspian - 6 39 - 13 58
Africa - 1 2 - 2 5
Americas 1 14 7 - - 22
Asia
Pacific 2 3 9 - 4 18
Corporate
and other - - - 18 - 18
Total 3 24 57 18 19 121
=== === === === === ===
(3) The average age of our fleet,
excluding training aircraft, was
approximately nine years as of
June 30, 2017.
(4) The 113 aircraft operated by our
unconsolidated affiliates do not
include those aircraft leased from
us. Includes 43 helicopters
(primarily medium) and 24 fixed
wing aircraft owned and managed by
Líder Táxi Aéreo S.A. ("Líder"),
our unconsolidated affiliate in
Brazil included in the Americas
region, and 39 helicopters and 7
fixed wing aircraft owned by
Petroleum Air Services ("PAS"),
our unconsolidated affiliate in
Egypt included in the Africas
region.
(5) This table does not reflect
aircraft which our unconsolidated
affiliates may have on order or
under option.
BRISTOW GROUP INC. AND SUBSIDIARIES
FY18 GUIDANCE
FY18 guidance as of June 30, 2017 (1)
Operating revenue(2) Adjusted EBITDA2,3 Rent(2)
-------
Oil and
gas ~$850M - $950M ~$(35M) - $(10M) ~$155M - $165M
-------------- --------------
U.K. SAR ~$215M - $230M ~$40M - $50M ~$45M - $50M
-------------- ------------ ------------
Eastern ~$105M - $115M ~$0 - $5M ~$10M - $12M
-------------- --------- ------------
Airnorth ~$80M - $90M ~$5M - $10M ~$10M - $12M
Total ~$1.3B - $1.4B ~$15M - $50M ~$225M - $235M
----- -------------- ------------ --------------
G&A
Expense4 ~$170M - $190M
--------- --------------
Depreciation
Expense ~$120M - $130M
------------ --------------
Total
aircraft
rent5 ~$200M - $205M
--------- --------------
Total non-
aircraft
rent5 ~$25M - $30M
---------- ------------
Interest
expense ~$55M - $65M
-------- ------------
Non-
aircraft
capex4 ~$45M annually
--------- --------------
(1) FY18 guidance assumes FX rates as of June
30, 2017.
(2) Operating revenue, EBITDA and rent for oil
and gas includes corporate and other
revenue and the impact of corporate
overhead expenses.
(3) EBITDA for U.K. SAR and fixed wing
(Eastern/Airnorth) excludes corporate
overhead allocations consistent with
financial reporting. 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 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) Updated from guidance as of March 31,
2017.
(5) 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
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:
Three Months Ended
June 30,
2017 2016
---- ----
(In thousands, except
per share amounts)
Net loss $(55,746) $(41,072)
(Gain) loss on disposal of
assets (699) 10,017
Special items 10,866 6,559
Depreciation and
amortization 31,056 34,694
Interest expense 16,235 11,120
Provision (benefit) for
income taxes 13,491 (2,238)
Adjusted EBITDA $15,203 $19,080
======= =======
(Provision) benefit for
income taxes $(13,491) $2,238
Tax expense (benefit) on
gain (loss) on disposal of
asset 4,573 (3,206)
Tax provision on special
items 11,397 8,526
Adjusted benefit for income
taxes $2,479 $7,558
====== ======
Effective tax rate (1) (31.9)% 5.2%
Adjusted effective tax rate
(1) 7.7% 38.0%
Net loss attributable to
Bristow Group $(55,275) $(40,772)
Loss on disposal of assets 3,874 6,811
Special items 22,263 21,953
Adjusted net loss $(29,138) $(12,008)
======== ========
Diluted loss per share $(1.57) $(1.17)
Loss on disposal of assets 0.11 0.19
Special items 0.63 0.63
Adjusted diluted loss per
share (0.83) (0.34)
(1) Effective tax rate is
calculated by dividing
benefit (provision) for
income tax by pretax net
income (loss). Adjusted
effective tax rate is
calculated by dividing
adjusted benefit
(provision) for income
tax by adjusted pretax
net income (loss). Tax
expense (benefit) on loss
on disposal of asset and
tax expense (benefit) on
special items is
calculated using the
statutory rate of the
entity recording the loss
on disposal of asset or
special item.
Three Months Ended
June 30, 2017
Adjusted Adjusted Adjusted
EBITDA Net Loss Diluted
Loss
Per
Share
-----
(In thousands, except per share amounts)
Organizational
restructuring
costs (1) $(9,674) $(6,602) (0.19)
Tax items (2) - (14,886) (0.42)
Inventory
impairment (1,192) (775) (0.02)
------ ----
Total special items $(10,866) $(22,263) (0.63)
======== ========
Three Months Ended
June 30, 2016
Adjusted Adjusted Adjusted
EBITDA
Net Loss Diluted
Loss
Per
Share
-----
(In thousands, except per share amounts)
Organizational
restructuring
costs (1) $(6,559) $(4,292) (0.12)
Additional
depreciation
expense resulting
from fleet changes
(3) - (4,490) (0.13)
Tax valuation
allowances (2) - (13,171) (0.38)
--- -------
Total special items $(6,559) $(21,953) (0.63)
======= ========
(1) Organizational restructuring
costs include severance expense
included in direct costs and
general and administrative
expense from our voluntary and
involuntary separation programs.
(2) Relates to a one-time non-cash
tax effect from repositioning of
certain aircraft from one tax
jurisdiction to another related
to recent financing transactions
for the June 2017 quarter and
non-cash adjustments related to
the valuation of deferred tax
assets for all periods
presented.
(3) Relates to additional
depreciation expense due to
fleet changes.
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SOURCE Bristow Group Inc.
