-----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, H9NQ8IHCpWdSuVteTp74CkJh6G5zAqC89DarXw6V1pt2rLS3UYkOE05wAqnK3aDT ebQtLvY/s2po/d02BgkANw== 0000073887-96-000004.txt : 19960410 0000073887-96-000004.hdr.sgml : 19960410 ACCESSION NUMBER: 0000073887-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960209 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OFFSHORE LOGISTICS INC CENTRAL INDEX KEY: 0000073887 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 720679819 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05232 FILM NUMBER: 96514127 BUSINESS ADDRESS: STREET 1: 224 RUE DE JEAN STREET 2: PO BOX 5C CITY: LAFAYETTE STATE: LA ZIP: 70505 BUSINESS PHONE: 3182331221 MAIL ADDRESS: STREET 1: 224 RUE DE JEAN 70508 STREET 2: PO BOX 5C CITY: LAFAYETTE STATE: LA ZIP: 70505 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 December 31, 1995 / / Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period _____ to ______ Commission File Number 0-5232 Offshore Logistics, Inc. - ---------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 72-0679819 - ------------------------------------- ---------------------------- (State or other jurisdiction of (IRS Employer ID Number) incorporation or organization) 224 Rue de Jean P. O. Box 5C, Lafayette, LA 70505 - ------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 318-233-1221 ------------------------- - ---------------------------------------------------------------------------- (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, and (2) has been subject to such filing requirements for the past 90 days. Yes / x / No / / Indicate the number shares outstanding of each of the issuer's classes of Common Stock, as of December 31, 1995. 19,487,535 shares of Common Stock, $.01 par value - --------------------------------------------------------------------------- OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statement of Income (thousands of dollars, except per share amounts)
Three Months Ended Six Months Ended December 31, December 31, ------------------ ---------------- 1995 1994 1995 1994 ----- ----- ----- ----- GROSS REVENUE Operating revenue $ 39,878 $ 41,519 $ 78,869 $ 67,741 Gain (loss) on disposal of equipment 66 176 (158) 179 --------- --------- --------- --------- 39,944 41,695 78,711 67,920 OPERATING EXPENSES Direct cost 31,608 30,962 61,480 47,467 Depreciation and amortization 2,184 2,606 4,337 4,635 General and administration 3,152 2,872 6,252 4,620 --------- --------- --------- --------- 36,944 36,440 72,069 56,722 --------- --------- --------- --------- OPERATING INCOME 3,000 5,255 6,642 11,198 Earnings from unconsolidated entities 1,109 1,775 1,734 2,400 Interest income 1,050 609 2,051 1,308 Interest expense 192 268 400 445 --------- --------- --------- --------- INCOME BEFORE PROVISION FOR INCOME TAXES 4,967 7,371 10,027 14,461 Provision for income taxes 1,436 2,138 2,908 4,210 (Income) Loss of minority interest (75) (13) (4) (13) --------- --------- --------- --------- NET INCOME $ 3,456 $ 5,220 $ 7,115 $ 10,238 ========= ========= ========= ========= Earnings per common share and common equivalent share $ 0.18 $ 0.27 $ 0.36 $ 0.54 ========= ========= ========= ========= Common share and common equivalent shares outstanding 19,728,422 19,644,684 19,748,084 18,927,082 ========== ========== ========== ==========
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Balance Sheet (thousands of dollars)
December 31, June 30, 1995 1995 ------------ -------- ASSETS Current Assets: Cash and cash equivalents $ 52,637 $ 47,973 Investment in marketable securities 19,960 19,978 Accounts receivable 30,201 29,756 Inventories 28,001 26,710 Prepaid expenses 1,167 524 --------- --------- Total current assets 131,966 124,941 Investments in unconsolidated entities 8,811 8,829 Property and equipment - at cost: Land and buildings 2,977 2,868 Aircraft and equipment 128,384 125,393 --------- --------- 131,361 128,261 Less: accumulated depreciation and amortization (61,391) (58,558) --------- --------- 69,970 69,703 Other assets, primarily goodwill 25,220 25,878 --------- --------- $ 235,967 $ 229,351 ========= ========= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts payable $ 6,784 $ 4,647 Accrued liabilities 9,218 11,633 Current maturities of long-term debt 6,850 2,000 --------- --------- Total current liabilities 22,852 18,280 Long-term debt - less current maturities 900 5,600 Deferred credits 1,250 2,500 Deferred taxes 18,458 18,030 Minority interest 1,094 1,090 STOCKHOLDERS' INVESTMENT: Common Stock, $.01 par value, authorized 35,000,000 shares; outstanding 19,487,535 and 19,442,114 at December 31 and June 30, respectively (exclusive of 517,550 treasury shares) 195 194 Paid in capital 95,825 95,379 Retained earnings 95,393 88,278 --------- --------- 191,413 183,851 --------- --------- $ 235,967 $ 229,351 ========= =========
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statement of Cash Flows (thousands of dollars)
Six Months Ended December 31, ---------------- 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 7,115 $ 10,238 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,337 4,635 Increase in deferred taxes 428 959 Loss (Gain) on asset dispositions 158 (179) Equity in earnings from unconsolidated entities (over) under dividends received 0 (41) Minority interest in earnings 4 13 Decrease (Increase) in accounts receivable (445) 2,653 Increase in inventories (885) (140) Increase in prepaid expenses and other (681) (70) Increase in accounts payable 2,137 861 Decrease in accrued liabilities (2,429) (1,857) Decrease in deferred credits (1,250) (1,250) -------- --------- Net cash provided by operating activities 8,489 15,822 -------- --------- Cash flows from investing activities: Capital expenditures (4,608) (1,038) Proceeds from assets dispositions 150 277 Investment in marketable securities (11,952) 0 Proceeds from sale or maturity of marketable securities 11,988 0 Acquisitions, net of cash received 0 (8,153) -------- --------- Net cash used in investing activities (4,422) (8,914) -------- --------- Cash flows from financing activities: Repayment of debt 0 (3,224) Proceeds from borrowings 150 0 Issuance of common stock 447 1,776 -------- --------- Net cash provided by (used in) financing activities 597 (1,448) Net increase in cash 4,664 5,460 Cash and cash equivalents at beginning of year 47,973 27,225 -------- --------- Cash and cash equivalents at end of quarter $ 52,637 $ 32,685 ======== ========= Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 319 $ 282 Income taxes 4,148 2,641
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1995 NOTE A -- Basis of Presentation - ------------------------------- The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, any adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 1995, are not necessarily indicative of the results that may be expected for the year ending June 30, 1996. For further information, refer to the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended June 30, 1995. NOTE B -- Production Management Services - ---------------------------------------- The Company expanded its operations in July 1992 to include production management services. During fiscal 1993 and until October 29, 1993, the Company owned 50% of Seahawk Services, Inc. ("Seahawk"), a company which provided platform and production management services, offshore medical support services, and temporary personnel to the oil and gas industry. On October 29, 1993, the Company further expanded its interest in production management services when the Company exchanged its 50% investment in Seahawk for a 27.5% interest in Grasso Corporation whose wholly-owned subsidiary, Grasso Production Management, Inc. ("GPM"), also was engaged in the production management service business. On September 16, 1994, GPM became a wholly-owned subsidiary of the Company in a merger in which the Company acquired the remaining 72.5% interest in Grasso Corporation by issuing .49 of a share of the Company's Common Stock for each share of Grasso Corporation Common Stock owned. In addition, holders of Grasso Corporation Class B warrants received similar warrants for shares of the Company's Common Stock. The merger was treated as a purchase for accounting purposes which resulted in goodwill of approximately $22.3 million after stepping up the assets and liabilities of Grasso Corporation. The goodwill is being amortized over a 20 year period. The following summarized income statement data reflects the impact the GPM merger would have had on the Company's results of operations had the transactions taken place on July 1, 1994:
Proforma Results for the Six Months Ended December 31, 1994 ---------------------------------- Gross revenue $76,555 ======= Net income $ 9,766 ======= Earnings per common share and common equivalent share $ .50 =======
NOTE C -- Cathodic Protection Services - -------------------------------------- In October 1994, the Company acquired 75% of Cathodic Protection Services Company ("CPS"). CPS manufactures, installs and maintains cathodic protection systems to arrest corrosion in oil and gas drilling and production facilities, pipelines, oil and gas well casings, hydrocarbon processing plants, and other metal structures. The acquisition was treated as a purchase for accounting purposes which resulted in goodwill of approximately $3.8 million. The goodwill is being amortized over a 20 year period. The proforma effect of this acquisition as though it had been acquired at the beginning of fiscal 1995 is not material to the operating results of the Company. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A summary of operating results for the applicable periods is as follows:
Three Months Ended Six Months Ended December 31, December 31, ------------------ ---------------- 1995 1994 1995 1994 ---- ---- ---- ---- Gross revenue $39,944 $41,695 $78,711 $67,920 Operating expenses 36,944 36,440 72,069 56,722 ------- ------- ------- ------- Operating income 3,000 5,255 6,642 11,198 Earnings from unconsolidated entities 1,109 1,775 1,734 2,400 Interest income 1,050 609 2,051 1,308 Interest expense 192 268 400 445 ------- ------- ------- ------- Income before provision for income taxes 4,967 7,371 10,027 14,461 Provision for income taxes 1,436 2,138 2,908 4,210 (Income) Loss of minority interest (75) (13) (4) (13) ------- ------- ------- ------- Net income $3,456 $5,220 $7,115 $10,238 ======= ======= ======= =======
Results of Operations - --------------------- Consolidated: Consolidated operating revenues and expenses for the six months ended December 31, 1995 were $78.9 million and $72.1 million, respectively, an $11.1 million and $15.3 million increase from the prior year. The increase is primarily attributable to the consolidation of GPM and CPS during the prior year. Consolidated operating revenues and expenses for the three months ended December 31, 1995 were $39.9 million and $36.9 million, respectively, a $1.6 million decrease and $0.5 million increase compared to the prior year. Helicopter flight activity and GPM revenues decreased $0.8 million and $2.9 million respectively, offset by an increase in CPS revenues of $1.7 million. Operating expenses for helicopter services and CPS increased $1.6 million and $1.5 million, respectively, offset by a decrease in GPM expenses of $2.8 million. Helicopter Services: Total flight hours were approximately 26,400 and 54,000 for the three months and six months ended December 31, 1995, respectively, an 8% and 10% decrease compared to the same period in the prior year. Operating revenues from helicopter services were $22.1 million and $43.8 million for the three and six months ended December 31, 1995, respectively, a 4% and 8% decrease compared to the same period in the prior year. The decrease in flight activity and operating revenues is primarily related to activity in the Gulf of Mexico. Alaska activity has had some decrease compared to the prior year which is offset by an increase in International activity. Operating expenses for helicopter services were $18.8 million and $35.9 million for the three months and six months ended December 31, 1995, a 9% and 3% increase compared to the same period in the prior year. Gulf of Mexico flight activity was down approximately 2,500 and 6,000 hours for the three months and six months ended December 31, 1995, respectively, an 11% and 12% decrease compared to the same period in the prior year. Operating revenues for the Gulf of Mexico were $18.7 million and $37.0 million for the three months and six months ended December 31, 1995, respectively, a decrease of approximately $0.7 million and $2.5 million, respectively, compared to the same period in the prior year. Significant reduction in activity levels by several of the Company's larger customers has caused this decrease in flight hours and operating revenues. Operating expenses for the Gulf of Mexico for the three months and six months ended December 31, 1995 were $16.9 million and $32.4 million, respectively, a $1.9 million increase compared to the same periods in the prior year. The increase in operating expenses is primarily attributable to increases in maintenance and repair expenditures. Due to the reductions in operating revenues and the increase in expenditures, gross margins from Gulf of Mexico operations were significantly below prior year. Gross margins, excluding asset dispositions, for the three months and six months ended December 31, 1995 were 9.6% and 12.3%, respectively. Prior year gross margins were 22.0% and 22.8%, respectively. Alaska flight activity, revenues, and expenses for the three months and six months ended December 31, 1995 were down in comparison with the same periods in the prior year as a result of decreased activity from Alaska's major customer. Alaska operating revenue for the three months and six months ended December 31, 1995 were $1.5 million and $3.6 million, respectively. Alaska operating expenses for the same periods were $1.2 million and $2.5 million, respectively. Operating income from Alaska was $0.3 million and $1.1 million, for the three months and six months ended December 31, 1995, respectively, relatively unchanged from the prior year. International activity has increased from the prior year. International flight hours for the three months and six months ended December 31, 1995 were approximately 4,500 hours and 8,200 hours, respectively, an 11% and 14% increase from the prior year. International operating revenues were $4.1 million and $7.4 million for the three months and six months ended December 31, 1995. International operating expenses for the same periods were $2.8 million and $5.0 million, respectively. International operating income was $1.3 million and $2.4 million, for the three months and six months ended December 31, 1995, respectively, relatively unchanged from the prior year. Production Management Services: Operating revenues from GPM were approximately $7.9 million and $16.6 million for the three months and six months ended December 31, 1995, respectively. Prior year operating revenues were $10.8 million and $12.8 million for the three months ended December 31, 1994 and for the period from consolidation (September 16, 1994) to December 31, 1994, respectively. The decrease in operating revenues for the three months ended December 31, 1995 compared to the prior year relates primarily to the concentration on pricing policies which temporarily reduced activity levels from GPM. Operating expenses from GPM were approximately $7.9 million and $16.4 million for the three months and six months ended December 31, 1995, respectively. Prior year operating expenses were $10.8 million and $12.7 million for the three months ended December 31, 1994 and for the period from consolidation (September 16, 1994) to December 31, 1994, respectively. Overall, GPM operations were break-even for current and prior year periods. Cathodic Protection Services: Operating revenues from CPS were approximately $10.8 million and $20.6 million for the three months and six months ended December 31, 1995, respectively. Prior year operating revenues were $9.1 million for the three months and six months ended December 31, 1994. The increase in operating revenues for the three months ended December 31, 1995 compared to the prior year relates primarily to increased sales effort and increased prices in certain raw materials sold. Operating expenses from CPS were approximately $10.4 million and $20.3 million for the three months and six months ended December 31, 1995, respectively. Prior year operating expenses were $8.9 million for the three months and six months ended December 31, 1994. CPS gross margins for the three months and six months ended December 31, 1995 were $0.4 million and $0.3 million, respectively. Liquidity and Capital Resources - ------------------------------- Cash and cash equivalents (including marketable securities) were $72.6 million as of December 31, 1995, a $4.6 million increase from fiscal year end 1995. Total debt was $7.8 million as of December 31, 1995. The increase in current maturities of long-term debt is due to the CPS revolving credit facility expiring in less than 12 months. As of December 31, 1995, the Company had $10 million of credit available under an unsecured working capital line of credit from a bank. Management believes that normal operations will provide sufficient working capital and cash flow to meet debt service for the foreseeable future. Subsequent to December 31, 1995, the Board of Directors authorized management of the Company to repurchase up to 1,000,000 shares of the Company's Common Stock when warranted by market conditions. Subsequent to December 31, 1995, the Company adopted a Preferred Share Purchase Rights Plan designed to assure that all of the Company's stockholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against partial tender offers and other abusive tactics to gain control without paying all stockholders a fair price. Under the rights plan, the Company declared a dividend of one Preferred Share Purchase Right on each outstanding share of Common Stock. Each Right will entitle its holder to purchase one one-hundredth of a share of a new series of junior participating preferred stock, at an exercise price of $50.00. The Rights will be distributed to stockholders of record on February 29, 1996, and will trade with the Company's Common Stock until exercisable. The Rights extend for ten years and will expire on February 28, 2006. The effective income tax rates from continuing operations were 29% for the six months ended December 31, 1995 and 1994, and is based on the Company's projected effective tax rate for the fiscal year then ended. The Company has received notices from the United States Environmental Protection Agency that it is one of approximately 160 potentially responsible parties ("PRP") at one Superfund site in Texas, one of over 300 PRPs at two sites in Louisiana, and a PRP at a site in Rhode Island. The Company believes, based on presently available information, that its potential liability for clean-up and other response costs in connection with these sites is not likely to have a material adverse effect on the Company's business or financial condition. PART II Item 4. Submission of Matters to a Vote of Security Holders - ------ --------------------------------------------------- (a) The Annual meeting of Stockholders was held on December 6, 1995. (c) Matters voted on at the meeting included: 1. For the election of directors, all nominees were approved. The results were as follows:
NOMINEE FOR WITHHELD --------- ----- -------- James B. Clement 15,663,516 1,530 Louis F. Crane 15,664,473 573 David S. Foster 15,660,746 4,300 David M. Johnson 15,664,526 520 Kenneth M. Jones 15,665,026 20 Homer L. Luther, Jr. 14,846,043 819,003 Harry C. Sager 15,659,246 5,800 George M. Small 15,664,111 935 Howard Wolf 15,664,526 520
Item 6. Exhibits and Reports on Form 8-K - ------ -------------------------------- (a) Listed below are the documents filed as exhibits to this report. Exhibit 11-- Computation of Earnings Per Share Exhibit 27-- Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended December 31, 1995. 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. OFFSHORE LOGISTICS, INC. BY: /s/ James B. Clement ----------------------------- JAMES B. CLEMENT President Chief Executive Officer DATE: February 9, 1996 BY: /s/ George M. Small ----------------------------- GEORGE M. SMALL Vice President Chief Financial Officer DATE: February 9, 1996 EXHIBIT 11 Computation of Earnings Per Share
Three Months Ended Six Months Ended December 31, December 31, ------------------ ---------------- 1995 1994 1995 1994 ----- ----- ----- ----- PRIMARY: Weighted average shares outstanding 19,487,534 19,316,826 19,469,989 18,574,587 Net effect of dilutive stocks warrants based on the Treasury Stock method using average market price 15,767 25,946 22,396 54,458 Net effect of dilutive stock options based on the Treasury Stock method using average market price 225,121 301,912 255,699 298,037 ---------- ---------- ---------- ---------- 19,728,422 19,644,684 19,748,084 18,927,082 ========== ========== ========== ========== FULLY DILUTED: Weighted average shares outstanding 19,487,534 19,316,826 19,469,989 18,574,587 Net effect of dilutive stock warrants based on the Treasury Stock method using end of period market price 17,908 25,946 24,466 55,280 Net effect of dilutive stock options based on the Treasury Stock method using end of period market price 231,346 301,912 264,911 300,827 ---------- ---------- ---------- ---------- 19,736,788 19,644,684 19,759,366 18,930,694 ========== ========== ========== ========== (thousands of dollars, except per share data) Net income $ 3,456 $ 5,220 $ 7,115 $ 10,238 =========== =========== =========== =========== Per share amount-Primary $ 0.18 $ 0.27 $ 0.36 $ 0.54 =========== =========== =========== =========== Per share amount-Fully diluted $ 0.18 $ 0.27 $ 0.36 $ 0.54 =========== =========== =========== ===========
EX-27 2
5 1,000 6-MOS JUN-30-1996 JUL-01-1995 DEC-31-1995 52,637 19,960 30,201 0 28,001 131,966 131,361 61,391 235,967 22,852 900 0 0 195 191,218 235,967 78,869 78,711 61,480 72,069 0 0 400 10,027 2,908 7,115 0 0 0 7,115 0.36 0.36
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