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Bristow Group Reports Fiscal 2009 Third Quarter Financial Results

5th February 2009 - 00:05 GMT | by The Shephard News Team

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Bristow Group today reported financial results for the three months ended December 31, 2008, which is the Company's fiscal 2009 third quarter.

Highlights include:

For the December 2008 quarter:

-- Revenue increased 8% versus the December 2007 quarter to $283.0
million. Revenue gains occurred across most of our business units,
but most significantly in our Europe, Latin America and West Africa
business units. Revenue gains were driven in large part by increases
in rates, the addition of new aircraft and the consolidation of Norsk
Helikopters AS ("Norsk"), our Norwegian affiliate, effective October
31, 2008.
-- Operating income increased 101% to $73.7 million from $36.7 million in
the December 2007 quarter.
-- Income from continuing operations increased 82% to $47.6 million from
$26.2 million in the December 2007 quarter.
-- Diluted earnings per share from continuing operations increased to
$1.34 from $0.86 in the December 2007 quarter.
-- The largest factors affecting operating results for the December 2008
quarter include the following items:
-- The gain on the sale of 53 small aircraft, related inventory, spare
parts and offshore fuel equipment in the U.S. Gulf of Mexico (the "GOM
Asset Sale") on October 30, 2008, which increased operating income by
$37.8 million, income from continuing operations by $24.4 million and
diluted earnings per share by $0.69.
-- The strengthening U.S. Dollar and resulting changes in foreign
currency exchange rates during the December 2008 quarter, which
decreased operating income by $2.3 million, income from continuing
operations by $2.5 million and diluted earnings per share by $0.07.
-- A decrease in our overall effective tax rate to 25.1% for the December
2008 quarter resulting from a $2.6 million benefit related to tax
elections filed in the December 2008 quarter as part of an internal
reorganization and the resolution of $1.4 million in uncertain tax
positions, which increased income from continuing operations by $4.0
million and diluted earnings per share by $0.11. Excluding these
benefits, as well as the impact of the taxes associated with the GOM
Asset Sale, our overall effective tax rate for the December 2008
quarter was 25.5%.
-- Excluding the items discussed above, diluted earnings per share would
have been $0.61 in the December 2008 quarter. Additionally, as a
result of shares issued in our June 2008 equity offering and private
placement, diluted earnings per share in the December 2008 quarter was
further reduced by $0.21.


For the nine months ended December 31, 2008:

-- Revenue increased 14% versus the nine months ended December 31, 2007
to $858.8 million. Revenue gains occurred across all of our business
units, but most significantly in our Europe, Southeast Asia, West
Africa and U.S. Gulf of Mexico business units. Revenue gains were
driven in large part by increases in rates, the addition of new
aircraft and the consolidation of Norsk.
-- Operating income increased 26% to $145.7 million from $115.3 million
for the nine months ended December 31, 2007.
-- Income from continuing operations increased 21% to $98.3 million from
$81.5 million for the nine months ended December 31, 2007.
-- Diluted earnings per share from continuing operations increased to
$2.87 from $2.68 for the nine months ended December 31, 2007.
-- The largest factors affecting operating results for the nine months
ended December 31, 2008 were:
-- The gain on the GOM Asset Sale, which increased operating income by
$37.8 million, income from continuing operations by $24.4 million and
diluted earnings per share by $0.71.
-- The strengthening U.S. dollar and resulting changes in foreign
currency exchange rates during the nine months ended December 31,
2008, which decreased operating income by $6.0 million, income from
continuing operations by $2.5 million and diluted earnings per share
by $0.07.
-- Hurricanes in the U.S. Gulf of Mexico during the nine months ended
December 31, 2008, which resulted in a decrease in flight activity and
an increase in costs, reducing operating income by $2.1 million,
income from continuing operations by $1.8 million and diluted earnings
per share by $0.05.
-- Expense recognized in the nine months ended December 31, 2008 for a
bad debt provision of $1.3 million in Europe and revenue recognized in
the nine months ended December 31, 2008 related to contractual rate
escalations and retroactive rate adjustments applicable to services
performed in prior periods in Europe of $3.4 million and Russia, a
part of our Other International business unit, of $1.2 million.
Combined, these items increased operating income by $3.3 million,
income from continuing operations by $2.3 million and diluted earnings
per share by $0.07.
-- Decreases in operating results in Australia, part of our Southeast
Asia business unit, which resulted in a reduction in operating income
by $10.4 million, income from continuing operations by $7.4 million
and diluted earnings per share by $0.22.
-- The restructuring of our ownership interests in affiliates in Mexico,
part of our Latin America business unit, which resulted in several
changes effective April 1, 2008, which increased operating income by
$0.8 million, income from continuing operations by $3.7 million and
diluted earnings per share by $0.11.
-- A decrease in our overall effective tax rate to 26.9% for the nine
months ended December 31, 2008 resulting from a $2.6 million benefit
related to tax elections filed in the December 2008 quarter as part of
an internal reorganization and the resolution of $2.1 million in
uncertain tax positions, which increased income from continuing
operations by $4.7 million and diluted earnings per share by $0.14.
Excluding these benefits, as well as the impact of the taxes
associated with the GOM Asset Sale, our overall effective tax rate for
the nine months ended December 31, 2008 was 28.5%.
-- Excluding the items discussed above, diluted earnings per share would
have been $2.17 in the nine months ended December 31, 2008.
Additionally, as a result of shares issued in our June 2008 equity
offering and private placement, diluted earnings per share in the nine
months ended December 31, 2008 was further reduced by $0.35.
-- Financial results for the nine months ended December 31, 2007
included:
-- A reversal of accrued costs of $1.0 million associated with the
settlement of the U.S. Securities and Exchange Commission
investigation.
-- The reversal of $5.4 million in sales tax contingency in Nigeria.
-- $2.0 million of contractual rate escalations on services performed in
prior periods under contracts with our customers in Europe.
-- A $1.8 million impairment charge related to inventory in EH
Centralized Operations.
-- These items collectively increased operating income by $6.6 million,
income from continuing operations by $4.4 million and diluted earnings
per share by $0.14 during the nine months ended December 31, 2007.

Capital and Liquidity

-- At December 31, 2008 we continued to have a strong balance sheet,
which allows us the financial flexibility to take advantage of growth
opportunities:
-- $1.2 billion in stockholders' investment and $747.3 million of
indebtedness
-- $364.7 million in cash and $100 million undrawn revolving credit
facility
-- Aircraft purchase commitments totaled $298.4 million for 31 aircraft,
with options totaling $803.1 million for 47 aircraft
-- During the nine months ended December 31, 2008, we generated strong
cash flows, including:
-- $104 million of cash from operating activities
-- $87 million of proceeds from sales of assets, including the GOM Asset
Sale
-- $336 million in net proceeds from the sale of convertible senior notes
and common stock
-- We used $388 million for capital expenditures - primarily for aircraft
- and $16 million for acquisitions


CEO William Choles, said: "During our third fiscal quarter we continued to experience good growth in activity and revenue, particularly in Mexico, Brazil, Nigeria and the North Sea. This was driven by improved pricing and the continued upgrade of our fleet to larger, more efficient and more profitable aircraft,"

"Looking ahead, we know that Bristow will not be completely immune to the impact of declining commodity prices on E&P spending, but we do not expect to be as affected as other oil service companies. Although some of the demand for our services has softened and may continue to do so, our production focus, global critical mass of the largest fleet of helicopters and geographic and customer diversity should help us weather the cycle. We also continue to apply pricing and investment discipline.

"Our $465 million of cash and unused credit lines provides financial strength as we weather this uncertain operating environment and the flexibility to take advantage of good opportunities for long-term growth. We expect to continue to upgrade our fleet at a pace that should enable us to continue growing revenues and margins but at the same time recognizes the more challenging market environment we currently face."

 

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