-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, h3mx6EdWIAwKAe1/fjM7mkLC9NTRCm5fKvgBoCeT6njdhEfkg0lZaKl80/9oIqxC YVv9MeHTazZunLcMUFr10Q== 0000350403-94-000009.txt : 19940902 0000350403-94-000009.hdr.sgml : 19940902 ACCESSION NUMBER: 0000350403-94-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940731 FILED AS OF DATE: 19940831 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROLEUM HELICOPTERS INC CENTRAL INDEX KEY: 0000350403 STANDARD INDUSTRIAL CLASSIFICATION: 4522 IRS NUMBER: 720395707 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09827 FILM NUMBER: 94547471 BUSINESS ADDRESS: STREET 1: 113 BORMAN DRIVE STREET 2: P O BOX 23502 CITY: LAFAYETTE STATE: LA ZIP: 70508 BUSINESS PHONE: 5047336790 MAIL ADDRESS: STREET 1: 113 BORMAN DRIVE CITY: LAFAYETTE STATE: LA ZIP: 70508 10-Q 1 LIVE FILING OF 7/31/94 10Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 0-9827 PETROLEUM HELICOPTERS, INC. (Exact name of registrant as specified in its Charter) Delaware 72-0395707 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5728 JEFFERSON HIGHWAY, P. O. BOX 23502 NEW ORLEANS, LOUISIANA 70183 (Address of principal executive offices) (Zip Code) 504-733-6790 (Registrant's telephone number, including area code) _________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO . Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. Outstanding Class Aug. 31, 1994 Voting Common Stock(P/V $.08 1/3 P/S) 3,278,068 Non-Voting Common Stock(P/V $.08 1/3 P/S) 2,200,000 PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS July 31, April 30, 1994 1994 ___________ ___________ (Unaudited) * (Thousands of Dollars) ASSETS Current Assets: Cash and cash equivalents $ 4,936 $ 5,452 Accounts receivable - net of allowance 30,615 27,759 Inventory 25,020 24,850 Prepaid expenses 787 1,446 Refundable income taxes - 196 _______ _______ Total current assets 61,358 59,703 _______ _______ Notes receivable - 290 Investments 1,140 597 Property and equipment: Cost 193,494 194,810 Less accumulated depreciation (109,774) (109,171) _______ _______ 83,720 85,639 _______ _______ Other assets 99 83 _______ _______ $ 146,317 $ 146,312 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 17,373 $ 15,740 Accrued vacation pay 4,687 4,687 Income taxes payable 166 - Current portion of long-term debt 8,717 8,704 _______ _______ Total current liabilities 30,943 29,131 _______ _______ Long-term debt 28,881 31,849 Deferred income taxes 10,023 10,023 Stockholders' equity: Voting common stock 273 273 Non-voting common stock 183 183 Additional paid-in capital 11,027 11,027 Retained earnings 64,987 63,826 _______ _______ 76,470 75,309 _______ _______ $ 146,317 $ 146,312 ======= ======= *The balance sheet at April 30, 1994 is condensed from the audited financial statements at that date. See notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) Three Months Ended July 31, 1994 1993 ________ ________ (Thousands of dollars, except per share amounts) Revenues: Operating revenues $ 43,557 $ 47,618 Gain on equipment disposals 772 44 Equity in net earnings of investee companies 61 15 _______ _______ 44,390 47,677 _______ _______ Expenses: Direct expenses 39,250 42,550 Selling, general and administrative expenses 2,448 2,424 Interest expense 756 602 _______ _______ 42,454 45,576 _______ _______ Earnings before income taxes 1,936 2,101 Income taxes 775 850 _______ _______ Net earnings $ 1,161 $ 1,251 ======= ======= Net earnings per share $ .21 $ .23 ======= ======= Weighted average common shares outstanding 5,478 5,478 ======= ======= Dividends paid per common share $ -0- $ -0- ======= ======= See notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended July 31, 1994 1993 ______ ______ (Thousands of Dollars) Operating activities: Net earnings $ 1,161 $ 1,251 Depreciation 2,007 1,960 Gain on equipment disposals (772) (44) Equity in net earnings of investee companies (61) (15) Changes in operating assets and liabilities (289) 1,120 _______ _______ Net cash provided by operating activities 2,046 4,272 _______ _______ Investing activities: Purchases of property and equipment (666) (5,762) Proceeds from equipment disposals 1,350 45 Other (291) - _______ _______ Net cash provided (used) by investing activities 393 (5,717) _______ _______ Financing activities: Proceeds from long-term debt 2,000 25,030 Payments on long-term debt (4,955) (21,304) _______ _______ Net cash provided (used) by financing activities (2,955) 3,726 _______ _______ Increase (decrease) in cash and cash equivalents (516) 2,281 Cash and cash equivalents at beginning of period 5,452 2,309 _______ _______ Cash and cash equivalents at end of period $ 4,936 $ 4,590 ======= ======= See notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED JULY 31, 1994 AND 1993 (UNAUDITED) A. These financial statements, except for the April 30, 1994 condensed balance sheet, have been prepared without audit in compliance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that this information is fairly presented. It is suggested that these condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended April 30, 1994 and its accompanying notes and Management's Discussion and Analysis of Financial Condition and Results of Operations. B. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal, recurring adjustments, necessary to fairly present the financial results for the interim periods presented. C. The Company's financial results, particularly as it relates to its domestic oil and gas operations, are influenced by seasonal fluctuations. During the Company's third fiscal quarter, there are historically more days of adverse weather conditions and fewer hours of daylight than the other months of the year. Consequently, flight hours are generally lower during the winter than they are at other times of the year. This produces a seasonal aspect to the Company's business and typically results in reduced revenues from operations during those months. Therefore, the results of operations for interim periods are not necessarily indicative of the operating results that may be expected for the full fiscal year. D. Certain reclassifications have been made to the prior year's financial statements in order to conform with the classifications adopted for reporting in 1994. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a comparison of the first quarter of the fiscal year ending April 30, 1995 with the comparable period of the prior fiscal year. The Company is engaged in providing helicopter transportation and related services. The predominant portion of its revenue is derived from transporting offshore oil and gas production and drilling workers on a worldwide basis. The Company also performs helicopter transportation services for a variety of hospital and medical programs and aircraft maintenance to outside parties. RESULTS OF OPERATIONS Operating revenues decreased $4 million, or 8%, to $43.6 million in the first quarter of fiscal 1995 compared to $47.6 million in the prior year period. The overall decrease was primarily the result of a 9% decrease in flight hours from 56,997 to 52,072. Declines in domestic oil and gas and maintenance revenues were partially offset by increases in the Company's aeromedical and international markets. Domestic oil and gas revenues declined $5.6 million, or 16% from $34.6 million to $29 million. The decrease was related to the loss of four contracts which represented $4.6 million in billings in the first quarter of fiscal 1994. The remainder of the decrease is primarily a result of competitive pricing pressures in the Gulf of Mexico. Aeromedical revenues increased $1.6 million, or 33% to $6.5 million in fiscal 1995 from $4.9 million in the same period of fiscal 1994. Aeromedical flight hours increased 24% to 3,754 as compared to 3,036. The increase is due to the addition of five new programs and eight new dedicated aircraft during the past 15 months. International oil and gas revenues increased 39% to $4.3 million from $3.1 million. Flight hours in the Company's interna- tional markets increased 8% from 4,867 to 5,242. The addition of two new programs involving two helicopters and one fixed wing aircraft resulted in the improved revenues. Other revenues, including maintenance, declined $1.2 million to $3.8 million from $5 million. The decrease was due to a $1.2 million project in fiscal 1994. The current quarter's results included a gain on disposal of equipment of $0.8 million. The gain resulted from the disposition of four aircraft. No aircraft were disposed of in the first quarter of last year. The Company's operating margin declined to 10% for the current quarter from 11% in the prior year's quarter. Consistent with the decline in revenues and flight hours, direct operating costs declined 8% or $3.3 million. The decrease resulted primarily from a decline in salaries and benefits of $1.7 million related to a 10% staff reduction. Cost of sales fell $0.7 million related to the reduction in maintenance revenues. Fuel expense fell $0.3 million because of reduced flight hours and a 2% price reduction. Selling, general and administrative expenses were constant at $2.4 million with fiscal 1995 including $0.3 million of profession- al fees associated with the proposed transaction described below. First quarter interest expense increased to $0.8 million from $0.6 million. The increase was primarily attributable to rising interest rates partially offset by a decrease in the average balance of debt outstanding. LIQUIDITY AND CAPITAL RESOURCES Working capital as of the quarter ended July 31, 1994 was $30.4 million compared to $30.6 million at April 30, 1994, the Company's fiscal year end. The Company had total long-term debt of approximately $37.6 million and lease commitments of approximately $64 million as of July 31, 1994. Stockholders' equity rose $1.2 million to $76.5 million at July 31, 1994. The increase was generated entirely from operating profits. Cash decreased $0.5 million during the quarter. Net cash provided by operations was $2 million. Cash aggregating $0.4 million was provided by investing activities and $3 million was used to reduce long-term debt. Certain covenants contained in the Company's financing agreement prohibit the Company from incurring debt above the amount available, $13.3 million and $11 million at July 31, 1994, under its present revolving credit and term loan facilities, respective- ly. Other covenants included in the financing agreement restrict the amount of dividends, capital expenditures, and investments. In July 1994, the Company entered into an agreement (the "Agreement") with American Eurocopter Corporation (AEC) to acquire up to 25 emergency medical service (EMS) contracts and the related helicopters and certain other assets that service these contracts from Rocky Mountain Helicopters (RMH). RMH is presently operating under Chapter 11 of the U.S. Bankruptcy Code. PHI's agreement with AEC, one of the largest creditors of RMH, is conditional upon, among other things, bankruptcy court confirmation of AEC's plan. RMH has filed its own plan of reorganization and is currently expected to oppose the AEC plan and the closing of the Agreement. Management estimates annual revenues associated with the EMS contracts are $27 million. If these contracts and assets are ultimately acquired, PHI would pay AEC a portion of the contract revenues received as reimbursement of the purchase price and assume certain post closing obligations under the EMS contracts and the helicopter leases and financing instruments. While the acquisition of these contracts and assets may have a material impact on future operations, management does not believe that such event would have a materially unfavorable effect on the Company's liquidity or capital resources. The Company believes its cash flow from operations in conjunction with its credit capacity is sufficient to meet its planned requirements for the forthcoming fiscal year. RESULTS AT A GLANCE (Unaudited) The following table provides a summary of critical operating and financial statistics (thousands of dollars, except per share amounts, financial ratios and general statistics): Three Months Ended July 31, 1994 1993 ______ ______ OPERATIONS Operating revenues $ 43,557 $ 47,618 Expenses 42,454 45,576 Net earnings 1,161 1,251 Net earnings per share .21 .23 Annualized return on shareholders' equity 6.1% 6.8% July 31, 1994 April 30, 1994 _____________ _______________ FINANCIAL SUMMARY Net working capital $ 30,415 $ 30,572 Net book value of property and equipment 83,720 85,639 Long-term debt 28,881 31,849 July 31, 1994 April 30, 1994 _____________ ______________ GENERAL STATISTICS Total flight hours 52,072 56,997 Helicopters 263 266 Employees 1,667 1,697 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Master Helicopter Lease Agreement dated May 29, 1991 between AT&T Systems Leasing Corporation and PHI (incorporated by reference to Exhibit No. 10.1(2) to PHI's Report on Form 10-K dated April 30, 1992). 10.2 Master Helicopter Lease Agreement dated February 14, 1991 between General Electric Capital Corpo- ration and PHI (incorporated by reference to Exhibit No. 10.1(1) to PHI's Report on Form 10-K dated April 30, 1991). 10.3 Amended and Restated Loan Agreement originally dated as of January 31, 1986 Amended and Restated in its entirety as of July 9, 1993 among Petro- leum Helicopters, Inc., Whitney National Bank, First National Bank of Commerce, NationsBank of Texas, N.A. and NationsBank of Texas, N.A. as agent (incorporated by reference to Exhibit No. 10.3 to PHI's Report on Form 10-K dated April 30, 1993). 10.4 Installment promissory note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,122,441.56, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1993). 10.5 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078,695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.5 to PHI's Report on Form 10-K dated April 30, 1993). 10.6 Installment Promissory Note dated June 4, 1993 by PHI payable to debis Financial Services, Inc. in the original principal amount of $3,078.695.58, secured by Aircraft Security Agreement dated June 4, 1993 between PHI and debis Financial Services, Inc. (incorporated by reference to Exhibit No. 10.6 to PHI's Report on Form 10-K dated April 30, 1993). 10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan effective July 1, 1989 (incorporated by reference to Exhibit No. 10.4 to PHI's Report on Form 10-K dated April 30, 1990). 10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan adopted by PHI's Board effective May 1, 1992 and approved by the stockholders of PHI on September 30, 1992 (incorporated by reference to Exhibit No. 10.8 to PHI's Report on Form 10-K dated April 30, 1993). 10.9 Form of Stock Option Agreement for the Grant of Non-Qualified Stock Options Under the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and Stock Appreciation Rights Plan dated June 2, 1993 between PHI and certain of its key employees (incorporated by reference to Exhibit No. 10.9 to PHI's Report on Form 10-K dated April 30, 1993). 10.10 Employment Agreement between PHI and John H. Untereker dated June 15, 1992 (incorporated by reference to Exhibit No. 10.10 to PHI's Report on Form 10-K dated April 30, 1993). 10.11 Stock Option Agreement between PHI and John H. Untereker dated April 12, 1993, but effective as of July 20, 1992 (incorporated by reference to Exhibit No. 10.11 to PHI's Report on Form 10-K dated April 30, 1993). 10.12 Asset Purchase Agreement by and among, among others, Rocky Mountain Helicopters, Inc., Ameri- can Eurocopter Corporation and PHI (incorporated by reference to Exhibit No. 10.12 to PHI's Report on Form 10-K dated April 30, 1994). (b) The Company filed one report on Form 8-K during the quarter ended July 31, 1994, dated July 19, 1994 reporting an "Other Event" pursuant to Item 5. No financial statements were filed with such Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Petroleum Helicopters, Inc. August 31, 1994 By: Carroll W. Suggs /s/ Carroll W. Suggs Chairman of the Board and Chief Executive Officer August 31, 1994 By: John H. Untereker /s/ John H. Untereker Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----