-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V+3Vo6+xhQheD9rpQmTZ3WtrWvCGOEPiUuAOIdYL/fTWNxQF/u+QC+Ooke5qkSQA 6cPQ+sjUzAIK04XGgr5VtA== 0000350403-97-000002.txt : 19970312 0000350403-97-000002.hdr.sgml : 19970312 ACCESSION NUMBER: 0000350403-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970311 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROLEUM HELICOPTERS INC CENTRAL INDEX KEY: 0000350403 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [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: 001-11581 FILM NUMBER: 97554486 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 10Q FOR PERIOD ENDING 01/31/97 ================================================================== United States SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: January 31, 1997 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) Louisiana 72-0395707 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2121 Airline Highway, Suite 400 P. O. Box 578 Metairie, Louisiana 70001-5979 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (504)828-3323 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 -- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 3, 1997 ----- ---------------------------- Voting Common Stock 2,797,786 Non-Voting Common Stock 2,293,545 =================================================================== PART 1 - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS In thousands January 31, April 30, (Current period unaudited) 1997 1996 (1) __________ __________ ASSETS Current assets: Cash and cash equivalents $ 2,152 $ 1,899 Accounts receivable - net of allowance 34,877 28,725 Refundable income taxes - 737 Inventory 30,263 25,947 Prepaid expenses 1,531 1,159 Notes receivable - investee companies 1,169 1,166 ------- ------- Total current assets 69,992 59,633 ------- ------- Notes receivable 22 358 Investments 5,345 4,890 Property and equipment: Cost 241,498 212,801 Less accumulated depreciation (123,340) (116,469) ------- ------- 118,158 96,332 ------- ------- Other 229 102 ------- ------- $ 193,746 $ 161,315 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 17,966 $ 19,467 Accrued vacation pay 4,707 4,813 Income taxes payable 1,782 - Current portion of long-term debt 8,853 8,810 ------- ------- Total current liabilities 33,308 33,090 ------- ------- Long-term debt 55,317 28,522 Deferred income taxes 14,666 14,966 Other long-term liabilities 3,636 3,336 Shareholders' equity: Voting common stock 280 280 Non-voting common stock 228 227 Additional paid-in capital 10,528 10,220 Retained earnings 75,783 70,674 ------- ------- 86,819 81,401 ------- ------- $ 193,746 $ 161,315 ======= ======= (1) The balance sheet at April 30, 1996 is condensed from the audited financial statements at that date. See accompanying notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS In thousands, except per Three Months Ended Nine Months Ended January 31, January 31, share amounts 1997 1996 1997 1996 (unaudited) ---- ---- ---- ---- REVENUES: Operating revenues $ 53,269 $45,444 $158,670 $ 139,724 Gain on equipment disposals 43 43 93 791 Equity in net earnings (loss) of investee companies (744) 225 (544) 325 ------ ------ ------- ------- 52,568 45,712 158,219 140,840 EXPENSES: Direct expenses 46,032 39,800 135,521 122,367 Selling, general and administrative expenses 3,102 3,038 9,669 8,402 Interest expense 1,181 777 3,200 2,312 ------ ------ ------- ------- 50,315 43,615 148,390 133,081 ------ ------ ------- ------- Earnings before income taxes 2,253 2,097 9,829 7,759 Income taxes 939 758 3,952 3,095 ------ ------ ------- ------- Net earnings $ 1,314 $ 1,339 $ 5,877 $ 4,664 ====== ====== ======= ======= Net earnings per share $ 0.26 $ 0.26 $ 1.16 $ 0.92 ====== ====== ======= ======= Weighted average common shares outstanding 5,078 5,066 5,077 5,066 ====== ====== ======= ======= Dividends declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.12 ====== ====== ======= ======= See accompanying notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands Nine Months Ended January 31, (unaudited) 1997 1996 ---- ---- OPERATING ACTIVITIES: Net earnings $ 5,877 $ 4,664 Depreciation 7,277 6,137 Gain on equipment disposals (93) (791) Equity in net (earnings) loss of investee companies 544 (325) Changes in operating assets and liabilities (10,159) (189) Other 254 241 ------ ------ Net cash provided by operating activities 3,700 9,737 ------ ------ INVESTING ACTIVITIES: Investments (957) (3,003) Purchases of property and equipment (30,657) (17,561) Proceeds from asset dispositions 2,065 2,141 ------ ------ Net cash used in investing activities (29,549) (18,423) ------ ------ FINANCING ACTIVITIES: Proceeds from long-term debt 38,425 23,803 Payments on long-term debt (11,587) (13,980) Dividends paid (762) (608) Other, net 26 - ------ ------ Net cash provided by financing activities 26,102 9,215 ------ ------ Increase in cash and cash equivalents 253 529 Cash and cash equivalents at beginning of period 1,899 2,506 ------ ------ Cash and cash equivalents at end of period $ 2,152 $ 3,035 ====== ====== See accompanying notes to condensed consolidated financial statements. PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED JANUARY 31, 1997 AND 1996 (UNAUDITED) A. These financial statements, except for the April 30,1996 condensed consolidated balance sheet, have been prepared without audit as permitted by 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. These condensed consolidated financial statements should be read in conjunction with the financial statements contained in the Company's Annual Report on Form 10-K for the year ended April 30,1996 and the 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 period 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 winter, there are 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 Company's third fiscal quarter than 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. Primary earnings per share are computed based on the weighted average number of shares and dilutive equivalent shares of common stock (stock options) outstanding during each year using the treasury stock method. E. Certain reclassifications have been made to the prior year's financial statements in order to conform with the classifications adopted for reporting in fiscal 1997. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 The following is a comparison of the third quarter and the first nine months of the fiscal year ending April 30, 1997 with the comparable period of the prior fiscal year. Third Quarter Fiscal 1997 to Third Quarter Fiscal 1996 Revenues The Company generates revenues from both ongoing service contracts with established customers and non-contract flights referred to as Specials. Domestic Oil and Gas contracts are generally on a month to month basis and consist of a fixed fee plus an hourly charge for actual flight time. Specials are customer flights, primarily domestic oil and gas, provided on an as needed basis that are not provided pursuant to ongoing contracts and which generally carry higher rates. International and aeromedical contracts also provide for fixed and hourly charges, but are generally for longer terms. These contracts impose early cancellation fees to encourage customers to fulfill the contract term and cover the Company's additional upfront costs in the event of early termination. The following table summarizes and compares the Company's revenues by certain market segment for the quarters ended January 31, 1997 and 1996: (Thousands of dollars, except Revenues for the Quarter Ended January 31, percentages and flight hours) ----------------------------------------- Increase -------- 1997 1996 $ % ---- ---- - - Domestic Oil and Gas $36,031 $32,376 $3,655 11 Aeromedical Services 7,321 6,761 560 8 International, Technical 9,917 6,307 3,610 57 Services and Other ------ ------ ----- -- Total Operating Revenues $53,269 $45,444 $7,825 17 ====== ====== ===== == Total Flight Hours 55,837 51,995 3,842 7 ====== ====== ===== == Domestic Oil and Gas Domestic Oil and Gas revenues increased $ 3.7 million, or 11%, to $ 36 million for the quarter. The Company attributes this increase to better economic conditions in the Gulf of Mexico. As of January 31, 1997, the Company had twenty-six more aircraft under contract than last year at January 31, 1996. Domestic flight hours increased 4%, to 40,834, from 39,401 hours, as compared to the quarter ended January 31, 1996. Aeromedical Services Aeromedical revenues increased to $ 7.3 million, or 8%, from $ 6.8 million. This increase is due primarily to the addition of three new programs which utilize three additional aircraft. Flight hours increased to 3,289 hours, or 11%, from 2,961 hours. International, Technical Services and Other International Oil and Gas revenues increased $ 2.7 million, or 73%, to $ 6.4 million. International flight hours increased 37% to 7,190 hours from 5,244 hours. The increase in revenue and flight hours is due primarily to the addition of one new contract which utilizes four aircraft and the utilization of four additional aircraft on an existing contract. This new contract is seasonal in nature with operations limited to October through February. Technical services and other revenues increased $ 0.9 million from $ 2.6 million to $ 3.5 million. Direct Expenses Direct expenses increased $ 6.2 million, or 16%, to $ 46 million primarily as a result of increased activity levels. Direct expenses as a percentage of operating revenues declined slightly which improved the Company's operating margin to 14% from 12% in the prior year's comparable quarter. Human resources costs, including employee benefit costs, increased $1.9 million, or 12%. This increase is due primarily to the increase in employees and employee overtime which were needed to support higher levels of flight activity. Helicopter expenses increased $ 2.1 million, or 11%, to $20.6 million. Spare parts usage, fuel expense, and depreciation expense increased $ 2.0 million, $ 0.3 million, and $ 0.3 million, respectively. These increases were primarily due to increased levels of flight activity, an increase in the average cost per gallon of aircraft fuel coupled with an increase in flight hours, and the purchase of additional aircraft, respectively. These costs were offset by a decrease in insurance costs of $ 0.5 million. Other expenses, Technical Services cost of goods sold, and environmental remediation expenses increased $ 1.0 million, $ 0.8 million, and $ 0.4 million, respectively. The $ 1.0 million increase in "other expenses" is consistent with increased flight activity levels. Selling, General and Administrative Expenses Selling, general, and administrative expenses increased slightly by $ 0.1 million to $ 3.1 million for the quarter. First Nine Months Fiscal 1997 to First Nine Months Fiscal 1996 The following table summarizes and compares the Company's revenues by certain market segment for the nine months ended January 31, 1997 and 1996: Revenues (Thousands of dollars, except Revenues for the Nine Months Ended percentages and flight hours) January 31, ---------------------------------- Increase 1997 1996 $ % ---- ---- - - Domestic Oil and Gas $ 109,141 $ 99,464 $ 9,677 10 Aeromedical Services 22,436 19,646 2,790 14 International, Technical 27,093 20,614 6,479 31 Services and Other ------ ------ ------ -- Total Operating Revenues $ 158,670 $ 139,724 $ 18,946 14 ======= ======= ====== == Total Flight Hours 183,661 163,752 19,909 12 ======= ======= ====== == Domestic Oil and Gas For the first nine months Domestic Oil and Gas revenues increased 10%, or $ 9.7 million, to $ 109.1 million due primarily to increased activity in the Gulf of Mexico. The Company attributes the increase to better economic conditions in the Gulf of Mexico; a result of increased oil prices and drilling activity. These factors produced an 8% increase in Domestic Oil and Gas flight hours. The company maintained its market share at 52% for the current and prior year period. Subsequent to January 31, 1997, a contract was terminated which aggregated $ 5.4 million in revenues during the initial nine months of the fiscal year. The Company anticipates that it will be able to redeploy the assets and personnel related to this contract in other activities thereby minimizing the impact on future prospects. Aeromedical Services Aeromedical revenues increased to $ 22.4 million, or 14%, from $ 19.6 million. Flight hours increased 16% to 10,980 hours from 9,479 hours. These increases are due primarily to the addition of three new programs which utilize three aircraft, and the utilization of three additional aircraft on existing contracts. As of January 31, 1997, the total Aeromedical contracts and aircraft were fifteen and forty, respectively. International, Technical Services and Other International Oil and Gas revenues increased substantially to $ 17.8 million, or 50%, from $11.9 million, due primarily to the addition of two new contracts which utilize twelve dedicated aircraft. International flight hours increased 40% to 21,840 hours from 15,567 hours. Technical services and other revenues increased to $ 9.3 million from $ 8.7 million, or 7%. Direct Expenses Direct expenses increased $ 13.2 million, or 11%, to $ 135.5 million primarily as a result of increased flight activity. Direct expenses as a percentage of operating revenues declined substantially which improved the Company's operating margin to 15% from 12% in the prior years comparable period. Human resources costs increased $ 5.2 million from $ 49.2 million to $ 54.4 million. The increase was primarily related to an increase in the number of employees and employee overtime which were needed to support increased flight activity levels. Helicopter expenses increased $ 3.3 million, or 6%, to $ 60.1 million from $ 56.8 million. Spare parts usage, fuel expense, and depreciation expense increased $ 2.1 million, $ 1.5 million, and $ 0.7 million, respectively. Spare parts usage increased due to increased flight activity. Fuel costs increased due to both an increase in flight activity and an increase in the average cost per gallon of aircraft fuel. Depreciation expense increased due to the purchase of additional aircraft. These costs were partially offset by a decrease in insurance expense of $ 1.1 million. Other expenses, Technical Services cost of goods sold, and environmental remediation expenses increased $ 3.3 million, $ 1.0 million, and $ 0.4 million, respectively. The $ 3.3 million increase in "other expenses" is consistent with increased flight activity levels. Selling, General and Administrative Expenses Selling, general, and administrative expenses increased $ 1.3 million from $ 8.4 million to $ 9.7 million. The increase was primarily a result of consultant fees related to information systems upgrades. LIQUIDITY AND CAPITAL RESOURCES The following is a comparison of the first nine months of the fiscal year ending April 30, 1997 with the period ending April 30, 1996. The Company's cash position as of January 31, 1997 was $ 2.2 million compared to $ 1.9 million at April 30, 1996, the Company's fiscal year end. Working capital increased $ 10.2 million from $ 26.5 million at fiscal year end to $ 36.7 million. The increase was primarily related to an increase in accounts receivable of $ 6.2 million, an increase in inventory of $ 4.3 million, and a decrease in accounts payable of $ 1.5 million offset by an increase in income taxes payable of $ 1.8 million. Total long-term debt increased $ 26.8 million to $ 55.3 million. On August 13, 1996 the Company and its principal lending group ratified a loan agreement that amended and restated its original loan agreement dated January 1, 1986. The new agreement increased the Company's credit capacity to $ 65 million from $ 55 million. In addition, the new agreement reduced the Company's effective interest rate on its outstanding debt under this facility. The projected interest expense reduction for the fiscal year ended April 30, 1997, using the total debt outstanding under this facility at January 31, 1997, is $0.1 million. The Company's current debt obligation totals $ 8.9 million, due in equal quarterly installments, which the Company intends to pay with cash flow from operations. At January 31, 1997, the Company had $ 10 million credit capacity available under its revolving credit facility. The Company is in compliance with all provisions of its loan agreement. During February, 1997, the Company modified its loan agreement with its principal lending group which among other things i) reduced the Company's effective interest rate, ii) increased the total credit capacity to $ 80 million from $ 65 million, iii) reduced the mandatory quarterly principal payments, and iv) provided a fixed rate option for up to $ 40 million of the total outstanding debt under the facility. The interest rate reduction was effective January 1, 1997. The projected interest expense reduction for this new agreement, for fiscal year ended April 30, 1997, using current debt levels at January 31, 1997, is $ 50,000. Cash generated from operating activities and financing activities was $ 3.7 million and $ 26.1 million, respectively. The Company utilized its cash flow from operating activities and financing activities to fund $ 29.5 million in investing activities. Investing activities primarily included the purchase of twenty-five aircraft for $ 18.8 million, and $ 7.9 million in aircraft capital improvements. The company paid dividends totaling $ 0.8 million or $ 0.15 per share. The Company has policies and procedures in effect to strictly monitor its compliance with environmental regulations at its operating locations. The Company has identified known or suspected fuel contamination at five of its bases. Although the full extent of contamination has not been determined, based on this preliminary information, a provision of $ 1.7 million was made for remediation costs through the fiscal year ended April 30, 1996 and an additional $ 0.8 million provision was made in the first nine months of fiscal 1997. The Company has expensed $ 0.8 million and $ 1.6 million, including the reserve provisions, for environmental costs for the three and nine month periods ending January 31, 1997, respectively. The Company will make additional provisions to the extent necessary as reliable estimates of these costs become available. In the first quarter of fiscal year 1996, the Company acquired a 49% interest in Irish Helicopters Limited (IHL) based in Dublin Ireland. IHL was notified in August 1996 that its principal service contract would not be renewed and terminated on December 31, 1996. As a result, IHL is reviewing a number of alternatives including the possibility that it will not continue as a going concern. During the third quarter of fiscal year 1997, the Company recorded a $ 0.7 million writedown, primarily ascribable to its investment in IHL. The Company's net investment in IHL is approximately $ 2.9 million as of January 31, 1997. 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, flight hours and general statistics): Nine Months Ended January 31, 1997 1996 ---- ---- Operations Operating revenues $ 158,670 $ 139,724 Net earnings 5,877 4,664 Net earnings per share 1.16 .92 Annualized return on shareholders' equity 9.3% 8% Total flight hours 183,661 163,752 Financial Summary January 31, 1997 April 30, 1996 ---------------- -------------- Net working capital $ 36,684 $ 26,543 Net book value of property and equipment 118,158 96,332 Long-term debt 55,317 28,522 General Statistics Helicopters Operated 302 261 Employees 1,819 1,677 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3.1 (i) Articles of Incorporation of the Company (incorporated by reference to Exhibit No. 3.1 (i) to PHI's Report on Form 10-Q for the quarterly period ended October 31, 1994). (ii) By-laws of the Company (incorporated by reference to Exhibit No. 3.1 (ii) to PHI's Report on Form 10-Q for the quarterly period ended July 31, 1996). 27 Financial Data Schedule. (b) Reports on Form 8-K No reports were filed on Form 8-K for the quarter ending January 31, 1997. 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. March 10, 1997 By: /s/ Carroll W.Suggs ---------------- Carroll W. Suggs Chairman of the Board, President and Chief Executive Officer (duly authorized officer) March 10, 1997 By: /s/ John H. Untereker ---------------------- John H. Untereker Vice President and Chief Financial Officer principal financial officer) EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JANUARY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 9-MOS APR-30-1997 JAN-31-1997 2152 0 34877 0 30263 69992 241498 123340 193746 33308 0 0 0 508 86311 193746 158670 158219 135521 145190 0 0 3200 9829 3952 5877 0 0 0 5877 1.16 1.16
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