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News Release

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
December 31,




Nine Months Ended
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,
2017


September 30,

2017


March 31,
2017


% Change

September 30, 2017

to December 31, 2017


% Change

March 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
December 31,


Nine Months Ended
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,
2017


March 31,
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 4½% 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
December 31,


Nine Months Ended
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
December 31,


Nine Months Ended
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

of Current

Period

Operating

Revenue


Aircraft in Consolidated Fleet







Helicopters


Fixed

Wing (1)




Unconsolidated

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

Wing


Total

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

Wing


Total

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

Rent2

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
December 31,


Nine Months Ended
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
EBITDA


Adjusted

Net Loss


Adjusted

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
EBITDA


Adjusted

Net Loss


Adjusted

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
EBITDA


Adjusted
Net Loss


Adjusted
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
EBITDA


Adjusted
Net Loss


Adjusted
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.

 

Cision View original content:http://www.prnewswire.com/news-releases/bristow-group-reports-third-quarter-fiscal-year-2018-results-300596187.html

SOURCE Bristow Group Inc.