Bristow Group Reports Third Quarter Fiscal Year 2018 Results
HOUSTON, Feb. 8, 2018 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported the following results for the three and nine months ended December 31, 2017. All amounts shown are dollar amounts in thousands unless otherwise noted:
Three Months Ended Nine Months Ended
December 31, December 31,
2017 2016 % Change 2017 2016 % Change
---- ---- -------- ---- ---- --------
Operating revenue $345,528 $324,353 6.5% $1,043,249 $1,024,199 1.9%
Net loss
attributable to
Bristow Group (8,273) (21,927) 62.3% (94,757) (92,496) (2.4)%
Diluted loss per
share (0.23) (0.62) 62.9% (2.69) (2.64) (1.9)%
Adjusted EBITDA
(1) 34,964 22,918 52.6% 82,545 67,397 22.5%
Adjusted net loss
(1) (18,450) (10,121) (82.3) (59,198) (34,415) (72.0)%
%
Adjusted diluted
loss per share
(1) (0.52) (0.29) (79.3) (1.68) (0.98) (71.4)%
%
Operating cash
flow 26,027 (42,893) * (9,307) (14,098) 34.0%
Capital
expenditures 12,124 17,860 (32.1) 36,441 119,726 (69.6)%
%
Rent expense 42,620 53,652 (20.6) 158,519 156,890 1.0%
%
December 31, September 30, March 31, % Change % Change
2017 2017
2017 September 30, 2017 March 31, 2017
to December 31, 2017 to December 31, 2017
-------------------- --------------------
Cash $117,848 $97,343 $96,656 21.1% 21.9%
Undrawn
borrowing
capacity
on
Revolving
Credit
Facility 387,584 292,039 260,320 32.7% 48.9%
------- ------- -------
Total
liquidity $505,432 $389,382 $356,976 29.8% 41.6%
======== ======== ========
______________
* percentage change too large to be
meaningful or not applicable
(1) A full reconciliation of non-GAAP
financial measurements is included
at the end of this news release
"Our third quarter results continue to demonstrate the success of the new Bristow in the face of ongoing industry challenges," said Jonathan Baliff, President and Chief Executive Officer of Bristow Group. "Our adjusted EBITDA was better than expected in the third quarter led by higher revenue from increased flying activity across several regions, while also benefiting from the operating leverage created by our lower cost hub structure. In addition, the third quarter benefited significantly from OEM cost recoveries, which, when coupled with capex deferrals, revenue improvement and cost control measures, delivered a significant increase in cash and liquidity."
BUSINESS AND FINANCIAL HIGHLIGHTS
-- Our operating revenue showed continued improvement year-over-year as all
U.K. SAR bases are fully online, fixed wing services were accretive, and
oil and gas service activity benefited from short-term activity in the
North Sea off Norway and in the U.S. Gulf of Mexico. In addition, during
the December 2017 quarter, we recovered $125 million in OEM costs
resulting in a $13.1 million reduction in rent expense (included in
direct cost) and a corresponding increase in adjusted EBITDA.
-- We are raising our fiscal 2018 adjusted EBITDA guidance to $100 million
- $115 million from $55 million - $85 million provided in November 2017,
as a result of better than expected operational and financial
performance including OEM cost recoveries.
-- We had $505.4 million of total liquidity as of December 31, 2017, an
increase of $116 million or 30% in the December 2017 quarter; we are
raising our liquidity guidance as of March 31, 2018 to a range of $450
million to $480 million, an increase of approximately $40 million over
our November 2017 guidance, primarily due to the issuance of $143.8
million of 4½% Convertible Senior Notes due 2023, net of amounts used
to pay down existing bank debt.
"I am incredibly proud of our team members who are delivering on our fiscal 2018 priorities of safety improvement, cost efficiencies, portfolio management and increased revenue," said Jonathan Baliff. "While the third quarter results tangibly demonstrate efforts like the OEM cost recoveries, the remainder of fiscal 2018 will remain challenging due to continued oversupply of aircraft and limited visibility into our clients' demand for aviation services. Our lower cost structure works for our clients, but we must continue to improve Target Zero safety as we successfully compete in a short cycle market that will likely continue into fiscal 2019."
Operating revenue from external clients by line of service was as follows:
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Oil and gas
services $236,655 $232,287 1.9%
Fixed wing
services 52,476 44,811 17.1%
U.K. SAR
services 55,659 45,193 23.2%
Corporate and
other 738 2,062 (64.2)%
--- -----
Total
operating
revenue $345,528 $324,353 6.5%
======== ========
The year-over-year increase in revenue was primarily driven by an increase in U.K. SAR services revenue due to additional bases coming online in fiscal years 2017 and 2018, an increase in our fixed wing services in our Europe Caspian, Asia Pacific and Africa regions and an increase in operating revenue for our oil and gas services primarily in our Americas and Europe Caspian regions due to an increase in activity. The activity level increase across our business was driven mostly by short term contracts, ad hoc and increased flying on existing contracts as we continue to see some stability in certain markets, especially in Norway and in the U.S. Gulf of Mexico.
The year-over-year change in net loss and diluted loss per share was primarily driven by one-time income tax benefits, higher revenue in the December 2017 quarter as discussed above, lower rent expense resulting from OEM cost recoveries in the December 2017 quarter and impairment charges on goodwill recorded in the December 2016 quarter that did not recur in the December 2017 quarter. These favorable changes were partially offset by higher interest expense and a higher loss on disposal of assets in the December 2017 quarter.
The GAAP net loss and diluted loss per share for the December 2017 quarter included the following special items:
-- Organizational restructuring costs of $2.8 million ($2.5 million net of
tax), or $0.07 per share, included in direct cost and general and
administrative expense, resulting from separation programs across our
global organization designed to increase efficiency and reduce costs,
and
-- A non-cash benefit from tax items of $15.1 million, or $0.42 per share,
including a $75.6 million benefit related to the revaluation of net
deferred tax liabilities to a lower tax rate resulting from the
enactment of the Tax Cuts and Jobs Act (the "Act") in December 2017 and
ongoing impact of valuation of deferred tax assets and recent financings
of $1.0 million, partially offset by the impact of deemed repatriation
of foreign earnings under the Act of $61.5 million.
Additionally, we had a loss on disposal of assets of $4.6 million ($2.5 million net of tax), or $0.07 per share, during the December 2017 quarter primarily related to a loss of $3.0 million from the sale or disposal of aircraft and other equipment.
Excluding the effect of special items and the loss on disposal of assets, the year-over-year change in adjusted net loss and adjusted diluted loss per share is primarily driven by an adjusted income tax expense in the December 2017 quarter compared to an adjusted income tax benefit in the December 2016 quarter and an increase in interest expense, partially offset by the increase in U.K. SAR, fixed wing services and oil and gas services revenue and the benefit from the OEM cost recoveries discussed above. The year-over-year change in adjusted EBITDA was primarily driven by the same increase in revenue and benefit from OEM cost recoveries.
The December 2016 quarter was also impacted by special items as reflected in the table at the end of this release.
LIQUIDITY AND FINANCIAL FLEXIBILITY
Don Miller, Senior Vice President and Chief Financial Officer, commented, "Our liquidity improved significantly by $116 million or 30% to $505.4 million at the end of the December 2017 quarter primarily due to the recovery of OEM costs and the issuance of $143.8 million of our convertible senior notes. In addition, we paid down $135.4 million of our bank term loans and ended the quarter with $400 million available under our revolver, before $12 million in letters of credit. We are raising our liquidity guidance as of March 31, 2018 to a range of $450 million to $480 million from $410 million to $450 million provided in November 2017 as we take actions to improve revenue, reduce cost, manage working capital and leverage our existing assets."
REGIONAL PERFORMANCE
--------------------
Europe Caspian
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $189,910 $172,844 9.9%
Operating
income $5,312 $(303) *
Operating
margin 2.8% (0.2)% *
Adjusted
EBITDA $18,614 $9,123 104.0%
Adjusted
EBITDA
margin 9.8% 5.3% 84.9%
Rent
expense $29,499 $34,115 (13.5)%
_____________
* percentage change too large to
be meaningful or not
applicable
The increase in operating revenue from the December 2016 quarter to the December 2017 quarter was primarily driven by an increase from the start-up of U.K. SAR bases since the December 2016 quarter, an increase in Norway primarily due to increases in activity and short-term contracts and an increase in fixed wing revenue. Partially offsetting these increases was a decrease in U.K. oil and gas revenue. Eastern Airways contributed $29.5 million and $25.1 million in operating revenue for the December 2017 quarter and December 2016 quarter, respectively.
A substantial portion of our operations in the Europe Caspian region are contracted in the British pound sterling, which depreciated significantly against the U.S. dollar in the December 2016 quarter as a result of Brexit. As a result of the changes in the British pound sterling, adjusted EBITDA was favorably impacted from foreign exchange changes of $0.7 million during the December 2017 quarter compared to an unfavorable impact of $11.3 million during the December 2016 quarter.
During the December 2017 quarter, we recorded a benefit to rent expense within our Europe Caspian region results of $7.1 million related to the OEM cost recoveries. Additionally, during the December 2016 quarter, we recorded an impairment of $8.7 million for the remaining goodwill related to Eastern Airways, which contributed to the operating loss in the December 2016 quarter, but was adjusted for in our calculation of adjusted EBITDA.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin increased in the December 2017 quarter primarily due an increase in operating revenue as a result of increased activity, the benefit to rent expense in the December 2017 quarter related to the OEM cost recoveries and favorable impacts from changes in foreign currency exchange rates, with operating income and operating margin also improving due to the goodwill impairment in the December 2016 quarter. These benefits were partially offset by increased salaries and benefits and maintenance expense year-over-year due to the increase in activity. Eastern Airways contributed a negative $4.1 million and a negative $2.1 million in adjusted EBITDA for the December 2017 quarter and December 2016 quarter, respectively.
Africa
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $47,915 $49,587 (3.4)%
Operating
income $10,470 $10,441 0.3%
Operating
margin 21.9% 21.1% 3.8%
Adjusted
EBITDA $14,206 $17,012 (16.5)%
Adjusted
EBITDA
margin 29.6% 34.3% (13.7)%
Rent
expense $2,048 $1,767 15.9%
Operating revenue for Africa decreased in the December 2017 quarter due to an overall decrease in activity compared to the December 2016 quarter. Activity declined with certain clients and certain contracts ended, which was only partially offset by an increase in activity with other clients. Additionally, fixed wing services in Africa generated $2.0 million and $1.0 million of operating revenue for the December 2017 quarter and December 2016 quarter, respectively.
Operating income remained flat while adjusted EBITDA and adjusted EBITDA margin decreased in the December 2017 quarter primarily due to the impact of changes in foreign currency exchange rates, which negatively impacted adjusted EBITDA by $2.2 million compared to the December 2016 quarter.
Americas
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $60,345 $53,024 13.8%
Earnings
from
unconsolidated
affiliates $2,097 $831 152.3%
Operating
income $5,308 $2,226 138.5%
Operating
margin 8.8% 4.2% 109.5%
Adjusted
EBITDA $12,689 $10,039 26.4%
Adjusted
EBITDA
margin 21.0% 18.9% 11.1%
Rent
expense $6,295 $5,638 11.7%
Operating revenue increased in the December 2017 quarter primarily due to an increase in activity from our U.S. Gulf of Mexico oil and gas operations and additional revenue from the search and rescue consortium in the U.S. Gulf of Mexico, partially offset by a decrease in operating revenue in Trinidad and Brazil due to lower activity.
Earnings from unconsolidated affiliates, net of losses, increased $1.3 million primarily due to an increase in earnings from our investment in Líder in Brazil due to reduced salaries and benefits and less of an unfavorable change in exchange rates which decreased our earnings from our investment in Líder by $0.8 million in the December 2017 quarter and decreased our earnings from our investment in Líder by $1.2 million in the December 2016 quarter.
The increases in operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were driven by the increase in revenue and earnings from unconsolidated affiliates discussed above, partially offset by an increase in rent expense.
Asia Pacific
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $50,248 $49,092 2.4%
Operating
loss $(941) $(9,012) 89.6%
Operating
margin (1.9)% (18.4)% 89.7%
Adjusted
EBITDA $4,797 $(5,027) *
Adjusted
EBITDA
margin 9.5% (10.2)% *
Rent
expense $2,807 $10,247 (72.6)%
_____________
*percentage change too large to be
meaningful or not applicable
Operating revenue increased in the December 2017 quarter primarily due to an increase from our fixed wing operations as Airnorth contributed $21.0 million and $18.7 million in operating revenue for the December 2017 quarter and December 2016 quarter, respectively.
Operating loss, operating margin, adjusted EBITDA and adjusted EBITDA margin improved in the December 2017 quarter primarily due to a benefit to rent expense of $6.0 million recorded in the December 2017 quarter related to the OEM cost recoveries and the increase in operating revenue discussed above. Airnorth contributed $2.2 million and $1.1 million in adjusted EBITDA for the December 2017 quarter and December 2016 quarter, respectively.
Corporate and other
Three Months Ended
December 31,
2017 2016 % Change
---- ---- --------
(in thousands, except percentages)
Operating
revenue $743 $2,099 (64.6)%
Operating
loss $(19,055) $(21,575) 11.7%
Adjusted
EBITDA $(15,342) $(8,229) (86.4)%
Rent
expense $1,971 $1,885 4.6%
Operating revenue decreased in the December 2017 quarter primarily due to a decrease in Bristow Academy revenue due to the sale of Bristow Academy on November 1, 2017.
Operating loss was lower for the December 2017 quarter primarily due to the sale of Bristow Academy, which incurred less of an operating loss in the December 2017 quarter compared to the December 2016 quarter. Adjusted EBITDA decreased primarily due to foreign currency transaction losses of $0.3 million recorded in the December 2017 quarter versus foreign currency transaction gains of $10.7 million in the December 2016 quarter.
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, February 9, 2018 to review financial results for the fiscal year 2018 third quarter ended December 31, 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 Third 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 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 and liquidity guidance, expected contract revenue, capital deployment strategy, operational and capital performance, expected cost management activities, original equipment manufacturer recoveries, expected capital expenditure deferrals 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 September 30, 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.
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 Nine Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
Gross revenue:
Operating revenue from non-
affiliates $328,944 $305,789 $991,655 $969,779
Operating revenue from
affiliates 16,584 18,564 51,594 54,420
Reimbursable revenue from
non-affiliates 15,207 13,090 43,271 40,109
------ ------ ------ ------
360,735 337,443 1,086,520 1,064,308
Operating expense:
Direct cost 271,864 260,343 842,128 831,516
Reimbursable expense 14,725 12,206 42,365 38,096
Depreciation and amortization 31,682 29,768 94,119 93,054
General and administrative 43,366 45,409 138,695 149,278
------ ------ ------- -------
361,637 347,726 1,117,307 1,111,944
Loss on impairment - (8,706) (1,192) (16,278)
Loss on disposal of assets (4,591) (874) (12,418) (13,077)
Earnings from unconsolidated
affiliates, net of losses 1,996 766 3,394 4,777
----- --- ----- -----
Operating loss (3,497) (19,097) (41,003) (72,214)
Interest expense, net (19,093) (12,179) (53,677) (34,533)
Other income (expense), net (766) 1,668 147 (1,518)
---- ----- --- ------
Loss before provision for
income taxes (23,356) (29,608) (94,533) (108,265)
Benefit (provision) for
income taxes 13,419 3,560 (2,546) 11,038
------ ----- ------ ------
Net loss (9,937) (26,048) (97,079) (97,227)
Net loss attributable to
noncontrolling interests 1,664 4,121 2,322 4,731
Net loss attributable to
Bristow Group $(8,273) $(21,927) $(94,757) $(92,496)
======= ======== ======== ========
Loss per common share:
Basic $(0.23) $(0.62) $(2.69) $(2.64)
Diluted $(0.23) $(0.62) $(2.69) $(2.64)
Non-GAAP measures:
Adjusted EBITDA $34,964 $22,918 $82,545 $67,397
Adjusted EBITDA margin 10.1% 7.1% 7.9% 6.6%
Adjusted net loss $(18,450) $(10,121) $(59,198) $(34,415)
Adjusted diluted loss per
share $(0.52) $(0.29) $(1.68) $(0.98)
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, March 31,
2017 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $117,848 $96,656
Accounts receivable from non-
affiliates 202,141 198,129
Accounts receivable from affiliates 12,638 8,786
Inventories 133,993 124,911
Assets held for sale 31,038 38,246
Prepaid expenses and other current
assets 43,668 41,143
------ ------
Total current assets 541,326 507,871
Investment in unconsolidated
affiliates 211,115 210,162
Property and equipment - at cost:
Land and buildings 241,792 231,448
Aircraft and equipment 2,511,322 2,622,701
--------- ---------
2,753,114 2,854,149
Less - Accumulated depreciation and
amortization (673,930) (599,785)
-------- --------
2,079,184 2,254,364
Goodwill 20,299 19,798
Other assets 115,233 121,652
------- -------
Total assets $2,967,157 $3,113,847
========== ==========
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $87,428 $98,215
Accrued wages, benefits and related
taxes 55,652 59,077
Income taxes payable 5,320 15,145
Other accrued taxes 6,095 9,611
Deferred revenue 17,922 19,911
Accrued maintenance and repairs 28,468 22,914
Accrued interest 6,292 12,909
Other accrued liabilities 72,292 46,679
Deferred taxes - 830
Short-term borrowings and current
maturities of long-term debt 93,136 131,063
------ -------
Total current liabilities 372,605 416,354
Long-term debt, less current
maturities 1,102,765 1,150,956
Accrued pension liabilities 54,291 61,647
Other liabilities and deferred
credits 37,768 28,899
Deferred taxes 141,904 154,873
Redeemable noncontrolling interest 3,859 6,886
Stockholders' investment:
Common stock 381 379
Additional paid-in capital 844,825 809,995
Retained earnings 894,684 991,906
Accumulated other comprehensive loss (307,353) (328,277)
Treasury shares (184,796) (184,796)
-------- --------
Total Bristow Group stockholders'
investment 1,247,741 1,289,207
Noncontrolling interests 6,224 5,025
----- -----
Total stockholders' investment 1,253,965 1,294,232
--------- ---------
Total liabilities, redeemable
noncontrolling interest and
stockholders' investment $2,967,157 $3,113,847
========== ==========
BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
December 31,
2017 2016
---- ----
Cash flows from operating activities:
Net loss $(97,079) $(97,227)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 94,119 93,054
Deferred income taxes (14,665) (20,991)
Write-off of deferred financing fees 1,138 -
Discount amortization on long-term
debt 343 1,314
Loss on disposal of assets 12,418 13,077
Loss on impairment 1,192 16,278
Deferral of lease payment 2,423 -
Stock-based compensation 8,776 9,508
Equity in earnings from
unconsolidated affiliates in excess
of dividends received (3,185) (4,294)
Increase (decrease) in cash resulting
from changes in:
Accounts receivable (3,785) 15,787
Inventories (4,618) (2,912)
Prepaid expenses and other assets 10,250 (4,359)
Accounts payable (14,540) (7,395)
Accrued liabilities (5,528) (19,891)
Other liabilities and deferred
credits 3,434 (6,047)
----- ------
Net cash used in operating activities (9,307) (14,098)
Cash flows from investing activities:
Capital expenditures (36,441) (119,726)
Proceeds from asset dispositions 48,547 14,344
Proceeds from OEM cost recoveries 94,463 -
Deposits received on aircraft held
for sale - 290
Net cash provided by (used in)
investing activities 106,569 (105,092)
Cash flows provided by (used in)
financing activities:
Proceeds from borrowings 548,768 360,240
Debt issuance costs (11,653) (3,883)
Repayment of debt (609,667) (243,677)
Purchase of 41/2% Convertible Senior
Notes call option (40,393) -
Proceeds from issuance of warrants 30,259 -
Partial prepayment of put/call
obligation (36) (38)
Dividends paid to noncontrolling
interest - (2,533)
Payment of contingent consideration - (10,000)
Common stock dividends paid (2,465) (7,366)
Repurchases for tax withholdings on
vesting of equity awards (591) (762)
---- ----
Net cash provided by (used in)
financing activities (85,778) 91,981
Effect of exchange rate changes on
cash and cash equivalents 9,708 (5,942)
----- ------
Net increase (decrease) in cash and
cash equivalents 21,192 (33,151)
Cash and cash equivalents at
beginning of period 96,656 104,310
------ -------
Cash and cash equivalents at end of
period $117,848 $71,159
======== =======
BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
Flight hours (excluding Bristow Academy and
unconsolidated affiliates):
Europe Caspian 22,909 20,921 68,762 65,703
Africa 7,417 7,145 22,561 22,869
Americas 7,954 5,337 23,810 17,504
Asia Pacific 6,672 6,691 19,991 19,759
Consolidated 44,952 40,094 135,124 125,835
====== ====== ======= =======
Operating revenue:
Europe Caspian $189,910 $172,844 $570,983 $548,070
Africa 47,915 49,587 146,523 153,055
Americas 60,345 53,024 178,884 168,578
Asia Pacific 50,248 49,092 153,365 155,144
Corporate and other 743 2,099 3,912 7,917
Intra-region eliminations (3,633) (2,293) (10,418) (8,565)
Consolidated $345,528 $324,353 $1,043,249 $1,024,199
======== ======== ========== ==========
Consolidated operating loss:
Europe Caspian $5,312 $(303) $19,610 $18,468
Africa 10,470 10,441 28,353 19,954
Americas 5,308 2,226 11,535 5,790
Asia Pacific (941) (9,012) (19,374) (24,480)
Corporate and other (19,055) (21,575) (68,709) (78,869)
Loss on disposal of assets (4,591) (874) (12,418) (13,077)
Consolidated $(3,497) $(19,097) $(41,003) $(72,214)
======= ======== ======== ========
Operating margin:
Europe Caspian 2.8% (0.2)% 3.4% 3.4%
Africa 21.9% 21.1% 19.4% 13.0%
Americas 8.8% 4.2% 6.4% 3.4%
Asia Pacific (1.9)% (18.4)% (12.6)% (15.8)%
Consolidated (1.0)% (5.9)% (3.9)% (7.1)%
Adjusted EBITDA:
Europe Caspian $18,614 $9,123 $58,716 $43,273
Africa 14,206 17,012 40,206 39,350
Americas 12,689 10,039 33,430 34,317
Asia Pacific 4,797 (5,027) 502 (10,513)
Corporate and other (15,342) (8,229) (50,309) (39,030)
Consolidated $34,964 $22,918 $82,545 $67,397
======= ======= ======= =======
Adjusted EBITDA margin:
Europe Caspian 9.8% 5.3% 10.3% 7.9%
Africa 29.6% 34.3% 27.4% 25.7%
Americas 21.0% 18.9% 18.7% 20.4%
Asia Pacific 9.5% (10.2)% 0.3% (6.8)%
Consolidated 10.1% 7.1% 7.9% 6.6%
Three Months Ended Nine Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
Depreciation and amortization:
Europe Caspian $12,771 $11,185 $36,789 $33,594
Africa 3,664 4,007 10,330 12,680
Americas 6,909 7,060 20,906 25,669
Asia Pacific 4,479 4,973 15,347 13,586
Corporate and other 3,859 2,543 10,747 7,525
Consolidated $31,682 $29,768 $94,119 $93,054
======= ======= ======= =======
Rent expense:
Europe Caspian $29,499 $34,115 $102,803 $100,007
Africa 2,048 1,767 6,424 6,101
Americas 6,295 5,638 18,480 16,258
Asia Pacific 2,807 10,247 24,356 28,803
Corporate and other 1,971 1,885 6,456 5,721
----- ----- ----- -----
Consolidated $42,620 $53,652 $158,519 $156,890
======= ======= ======== ========
BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
As of December 31, 2017
(Unaudited)
Percentage Aircraft in Consolidated Fleet
of Current
Period
Operating
Revenue
-------
Helicopters Fixed Unconsolidated
Wing (1) Affiliates (4)
------- -------------
Small Medium Large Total
(2)(3) Total
----- ------ ----- ------ -----
Europe Caspian 54% - 16 79 32 127 - 127
Africa 14% 9 28 5 5 47 48 95
Americas 17% 16 41 16 - 73 66 139
Asia Pacific 15% - 10 21 14 45 - 45
--- --- --- --- --- --- --- ---
Total 100% 25 95 121 51 292 114 406
=== === === === === === === ===
Aircraft not
currently in
fleet: (5)
On order - - 27 - 27
Under option - - 4 - 4
_____________
(1) Eastern Airways operates a
total of 32 fixed wing
aircraft in the Europe Caspian
region and provides technical
support for three 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 9 aircraft held for
sale and 102 leased aircraft
as follows:
Held for Sale Aircraft in Consolidated Fleet
Helicopters
Small Medium Large Fixed Total
Wing
----
Europe Caspian - 2 - - 2
Africa - 1 - 1 2
Americas - 4 - - 4
Asia Pacific - - - 1 1
--- --- --- --- ---
Total - 7 - 2 9
=== === === === ===
Leased Aircraft in Consolidated Fleet
Helicopters
Small Medium Large Fixed Total
Wing
----
Europe Caspian - 6 40 14 60
Africa - 1 2 2 5
Americas 3 14 6 - 23
Asia Pacific - 3 7 4 14
--- --- --- --- ---
Total 3 24 55 20 102
=== === === === ===
(3) The average age of our fleet was
approximately nine years as of
December 31, 2017.
(4) The 114 aircraft operated by our
unconsolidated affiliates do not
include those aircraft leased from
us. Includes 44 helicopters
(primarily medium) and 22 fixed wing
aircraft owned and managed by Líder
Táxi Aéreo S.A. ("Líder"), our
unconsolidated affiliate in Brazil
included in the Americas region, and
41 helicopters and seven fixed wing
aircraft owned by Petroleum Air
Services ("PAS"), our unconsolidated
affiliate in Egypt included in the
Africa 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 December 31, 2017 (1)
Operating revenue (2) Adjusted EBITDA2,3 Rent(2)
-------
Oil and gas ~$875M - $975M ~$40M - $50M 4 ~$130M - $140M 4
-------------- --------------
U.K. SAR ~$215M - $230M ~$55M - $60M 4 ~$45M - $50M
-------------- -------------- ------------
Eastern ~$105M - $115M ~$(5M) - $0M 4 ~$10M - $12M
-------------- -------------- ------------
Airnorth ~$80M - $90M ~$5M - $10M ~$10M - $12M
Total ~$1.3B - $1.4B ~$100M - $115M 4 ~$205M - $215M 4
----- -------------- ---------------- ----------------
G&A expense ~$170M - $190M
----------- --------------
Depreciation
expense ~$120M - $130M
------------ --------------
Total aircraft
rent 4, 5 ~$180M - $185M
-------------- --------------
Total non-
aircraft rent 5 ~$25M - $30M
---------------- ------------
Interest expense
4 ~$65M - $75M
---------------- ------------
Non-aircraft
capex ~$40M annually
------------ --------------
_____________
(1) FY18 guidance assumes FX rates as of
December 31, 2017.
(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) Updated from guidance provided in November
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 Nine Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
(In thousands, except
per share amounts)
Net loss $(9,937) $(26,048) $(97,079) $(97,227)
Loss on disposal of assets 4,591 874 12,418 13,077
Special items 2,810 9,537 16,352 34,361
Depreciation and amortization 31,682 29,768 94,119 93,054
Interest expense 19,237 12,347 54,189 35,170
(Benefit) provision for income taxes (13,419) (3,560) 2,546 (11,038)
Adjusted EBITDA $34,964 $22,918 $82,545 $67,397
======= ======= ======= =======
Benefit (provision) for income taxes $13,419 $3,560 $(2,546) $11,038
Tax provision (benefit) on loss on
disposal of assets (2,130) (1,953) 8,061 (5,858)
Tax provision (benefit) on special
items (15,448) 5,227 (1,272) 10,227
Adjusted (provision) benefit for
income taxes $(4,159) $6,834 $4,243 $15,407
======= ====== ====== =======
Effective tax rate (1) 57.5% 12.0% (2.7)% 10.2%
Adjusted effective tax rate (1) (26.1)% 37.9% 6.5% 29.9%
Net loss attributable to Bristow
Group $(8,273) $(21,927) $(94,757) $(92,496)
Loss (gain) on disposal of assets 2,461 (1,079) 20,479 7,219
Special items (12,638) 12,885 15,080 50,862
Adjusted net loss $(18,450) $(10,121) $(59,198) $(34,415)
======== ======== ======== ========
Diluted loss per share $(0.23) $(0.62) $(2.69) $(2.64)
Loss (gain) on disposal of assets 0.07 (0.03) 0.58 0.21
Special items (0.36) 0.37 0.43 1.45
Adjusted diluted loss per share (0.52) (0.29) (1.68) (0.98)
_____________
(1) Effective tax rate is
calculated by dividing
benefit (provision) for
income tax by pretax net
loss. Adjusted effective
tax rate is calculated by
dividing adjusted benefit
(provision) for income tax
by adjusted pretax net
loss. Tax provision
(benefit) on loss on
disposal of assets and tax
provision (benefit) on
special items is calculated
using the statutory rate of
the entity recording the
loss on disposal of assets
or special item.
Three Months Ended
December 31, 2017
Adjusted Adjusted Adjusted
EBITDA
Net Loss Diluted
Loss
Per
Share
-----
(In thousands, except per share amounts)
Organizational restructuring
costs (1) $(2,810) $(2,501) (0.07)
Tax items (2) - 15,139 0.42
Total special items $(2,810) $12,638 0.36
======= =======
Three Months Ended
December 31, 2016
Adjusted Adjusted Adjusted
EBITDA
Net Loss Diluted
Loss
Per
Share
(In thousands, except per share amounts)
Organizational restructuring
costs (1) $(831) $(583) (0.02)
Additional depreciation
expense resulting from fleet
changes (3) - (761) (0.02)
Goodwill impairment (4) (8,706) (7,857) (0.22)
Tax valuation allowances (2) - (3,684) (0.10)
--- ------
Total special items $(9,537) $(12,885) (0.37)
======= ========
Nine Months Ended
December 31, 2017
Adjusted Adjusted Adjusted
EBITDA Net Loss Diluted
Loss
Per
Share
-----
(In thousands, except per share amounts)
Organizational restructuring
costs (1) $(15,160) $(11,337) (0.32)
Inventory impairment (1,192) (775) (0.02)
Tax items (2) - (2,968) (0.08)
--- ------
Total special items $(16,352) $(15,080) (0.43)
======== ========
Nine Months Ended
December 31, 2016
Adjusted Adjusted Adjusted
EBITDA Net Loss Diluted
Loss
Per
Share
-----
(In thousands, except per share amounts)
Organizational restructuring
costs (1) $(18,083) $(12,171) (0.35)
Additional depreciation
expense resulting from fleet
changes (3) - (6,122) (0.17)
Goodwill impairment (4) (8,706) (7,857) (0.22)
Inventory impairment (7,572) (5,372) (0.15)
Tax valuation allowances (2) - (19,340) (0.55)
Total special items $(34,361) $(50,862) (1.45)
======== ========
_____________
(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
effect from tax items including a
$75.6 million benefit related to
the revaluation of net deferred
tax liabilities to a lower tax
rate resulting from the enactment
of the Tax Cuts and Jobs Act in
December 2017 and ongoing impact
of valuation of deferred tax
assets and recent financings of
$1.0 million, partially offset by
the impact of deemed repatriation
of foreign earnings under the Act
of $61.5 million for the three
months ended December 31, 2017.
Relates to a one-time non-cash
effect from tax items including a
$75.6 million benefit related to
the revaluation of net deferred
tax liabilities to a lower tax
rate resulting from the enactment
of the Tax Cuts and Jobs Act in
December 2017, partially offset by
the impact of deemed repatriation
of foreign earnings under the Act
of $61.5 million, the ongoing
impact of valuation of deferred
tax assets of $14.7 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 $2.4 million for the nine
months ended December 31, 2017.
Relates to a tax valuation
allowance of $3.7 million against
net operating losses in certain
foreign jurisdictions for the
three months ended December 31,
2016 and a tax valuation allowance
of $11.0 million against foreign
tax credits and $8.3 million
against net operating losses in
certain foreign jurisdictions for
the nine months ended December 31,
2016.
(3) Relates to additional depreciation
expense due to fleet changes.
(4) Relates to impairment of goodwill
of Eastern Airways in our Europe
Caspian region.
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SOURCE Bristow Group Inc.
