EX-99.1 2 ex99w1-110507.htm PRESS RELEASE ex99w1-110507.htm
                                                                                                                                         Exhibit 99.1
News Release

Contact:
Joe Baj, VP & Treasurer
(713) 267-7605
Linda McNeill, Treasury Manager
(713) 267-7622
 

BRISTOW GROUP REPORTS STRONG FISCAL 2008 SECOND QUARTER RESULTS
 
HOUSTON, November 5, 2007 – Bristow Group Inc. (NYSE: BRS) today reported financial results for its fiscal 2008 second quarter ended September 30, 2007.
 
Highlights include:
 
For the quarter ended September 30, 2007:

§  
Revenue of $273.3 million increased by 21.9 percent over the second quarter of fiscal year 2007.  Revenue gains occurred in most of our business units, driven by increases in rates for helicopter services and the addition of new aircraft;

§  
Operating income of $50.6 million and operating margin of 18.5 percent increased over operating income of $30.9 million and operating margin of 13.8 percent for the second quarter of fiscal year 2007, primarily as a result of the improvement in revenue as well as the items discussed below;

§  
Net income of $34.0 million increased by $14.9 million versus net income for the second quarter of fiscal year 2007.  Increases in operating income, foreign currency gains and earnings from unconsolidated affiliates contributed to the improvement in the latest quarter’s net income;

§  
Diluted earnings per share increased to $1.12 from $0.79 for the second quarter of fiscal year 2007.  Diluted earnings per share for the second quarter of fiscal years 2008 and 2007 reflected the assumed conversion of the Company’s Mandatory Convertible Preferred Stock, which added approximately 6.5 million and 0.7 million shares, respectively, to the weighted average diluted shares calculation.

§  
Operating results for the second quarter of fiscal year 2008 included the following items:

o  
Reversal of $1.0 million of previously accrued settlement costs associated with the U.S. Securities and Exchange Commission (“SEC”) investigation settled in September 2007.

o  
Reversal of a $5.4 million accrual for sales tax contingency in Nigeria.

o  
$2.1 million of retroactive rate increases with a major customer in Nigeria.

Excluding these items, operating income, operating margin, net income and diluted EPS would have been $42.1 million, 15.5%, $28.4 million and $0.93 per common share, respectively.


1


For the six months ended September 30, 2007:

§  
Revenue of $518.3 million increased by 16.4 percent over the same period of fiscal year 2007.  Revenue gains occurred in most of our business units, driven by increases in rates for helicopter services and the addition of new aircraft;

§  
Operating income of $80.5 million and operating margin of 15.5 percent increased over operating income of $61.9 million and operating margin of 13.9 percent for the same period in fiscal year 2007, primarily as a result of the improvement in rates;

§  
Net income of $56.6 million increased by $20.3 million versus net income for the six months ended September 30, 2006.  Increases in operating income, foreign currency gains and earnings from unconsolidated affiliates contributed to the improvement in year-to-date net income.

§  
Diluted earnings per share increased to $1.87 from $1.52 for the same period in fiscal year 2007.  Diluted earnings per share for the six months ended September 30, 2007 and 2006 reflected the assumed conversion of the Company’s Mandatory Convertible Preferred Stock, which added approximately 6.5 million and 0.3 million shares, respectively, to the weighted average diluted shares calculation.

§  
Operating results for the six months ended September 30, 2007 included the following items:

o  
Reversal of $1.0 million of previously accrued SEC settlement costs.

o  
Reversal of a $5.4 million accrual for sales tax contingency in Nigeria.

Excluding these items, operating income, operating margin, net income and diluted EPS would have been $74.1 million, 14.3%, $52.5 million and $1.73 per common share, respectively.

Capital and Liquidity:

§  
The September 30, 2007 consolidated balance sheet reflected $942.3 million in stockholders’ investment and $557.3 million of indebtedness;

§  
We had $276.4 million in cash and an undrawn $100 million revolving credit facility;

§  
We generated $43.5 million of cash from operating activities for the six months ended September 30, 2007.  We also used $221.1 million for capital expenditures, primarily for aircraft, and $12.9 million for the acquisition (net of cash acquired) of Bristow Academy during the six months ended September 30, 2007;

§  
Aircraft purchase commitments totaled $276.5 million, with options totaling $608.0 million as of September 30, 2007.
 
William E. Chiles, President and Chief Executive Officer of Bristow Group Inc., said, “We are very pleased with our strong financial performance and excellent execution against our strategic plan during the latest quarter. We continue to proceed with our plan to expand our fleet and we recently announced our decision to exercise options to acquire an additional four Sikorsky S-92® large helicopters and three Sikorsky S-76C++TM medium helicopters with a combined value of more than $100 million. All seven helicopters are expected to be delivered in late 2008.

"We also remain on target with our plan to improve overall margins and operating efficiencies.  We are systematically reviewing the profitability of our contracts and making a concerted effort to improve our return on capital, especially in Nigeria.

2
"The industry fundamentals continue to be very strong, and our customers remain committed to field development plans, which are the primary drivers of our growth.  We continue to believe demand for aircraft will exceed supply over the next several years, which should create good opportunities to enhance revenue and margin growth going forward.”

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EST (9:00 a.m. CST) on Tuesday, November 6, 2007, to review financial results for the fiscal quarter ended September 30, 2007.  The conference call can be accessed as follows:
 
Via Webcast:
§  
Visit Bristow Group’s investor relations Web page at http://www.bristowgroup.com
§  
Live: Click on the link for “Q2 2008 Bristow Group Inc. Earnings Conference Call”
§  
Replay: A replay via webcast will be available approximately one hour after the call’s completion
 
Via Telephone within the U.S.:
§  
Live: Dial toll free (800) 257-1836
§  
Replay: A telephone replay will be available through November 20, 2007, by dialing toll free (800) 405-2236, passcode: 11099470#
 
Via Telephone outside the U.S.:
§  
Live: Dial (303) 262-2139
§  
Replay: A telephone replay will be available through November 20, 2007 by dialing (303) 590-3000, passcode: 11099470#

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated.  Through its subsidiaries, affiliates and joint ventures, the Company has major transportation operations in the U.S. Gulf of Mexico and the North Sea, and in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, Russia and Trinidad.  For more information, visit the Company’s website at www.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 customer demand, industry conditions, future results, revenue growth, margins, operating efficiency, rate of return, the addition of new aircraft to our fleet and aircraft delivery.  It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements.  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, 2007 and the annual report on Form 10-K for the year ended March 31, 2007.  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.

 (financial tables follow)


3


BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 
 
Three Months Ended
September  30,
    
Six Months Ended
September 30,
  
 
2006
    
2007
    
2006
    
2007
  
   
(Unaudited)
  
Gross revenue:
                              
Operating revenue from non-affiliates
$
191,341
    
$
231,475
    
$
373,127
    
$
443,929
  
Operating revenue from affiliates
  
11,631
      
13,858
      
23,710
      
24,955
  
Reimbursable revenue from non-affiliates
  
20,091
      
25,505
      
46,216
      
45,853
  
Reimbursable revenue from affiliates
  
1,146
      
2,498
      
2,218
      
3,601
  
   
224,209
      
273,336
      
445,271
      
518,338
  
Operating expense:
                              
Direct cost
  
148,872
      
162,764
      
287,341
      
326,600
  
Reimbursable expense
  
20,879
      
25,793
      
47,778
      
47,034
  
Depreciation and amortization
  
10,737
      
12,395
      
21,020
      
23,768
  
General and administrative
  
16,527
      
21,039
      
31,876
      
40,301
  
Loss (gain) on disposal of assets
  
(3,667
)
    
754
      
(4,665
)
    
170
  
   
193,348
      
222,745
      
383,350
      
437,873
  
Operating income
  
30,861
      
50,591
      
61,921
      
80,465
  
Earnings from unconsolidated affiliates, net of losses
  
1,728
      
4,118
      
3,287
      
7,508
  
Interest income
  
1,069
      
4,049
      
2,359
      
6,247
  
Interest expense
  
(2,871
)
    
(6,523
)
    
(6,107
)
    
(9,456
)
Other income (expense), net
  
(1,308
)
    
360
      
(6,093
)
    
786
  
Income before provision for income taxes and minority interest
  
29,479
      
52,595
      
55,367
      
85,550
  
Provision for income taxes
  
(9,728
)
    
(18,641
)
    
(18,271
)
    
(28,475
)
Minority interest
  
(676
)
    
(4
)
    
(792
)
    
(453
)
Net income
  
19,075
      
33,950
      
36,304
      
56,622
  
Preferred stock dividends
  
(321
)
    
(3,163
)
    
(321
)
    
(6,325
)
Net income available to common stockholders
$
18,754
    
$
30,787
    
$
35,983
    
$
50,297
  
Earnings per common share:
                              
Basic
$
0.80
    
$
1.30
    
$
1.54
    
$
2.13
  
Diluted
$
0.79
    
$
1.12
    
$
1.52
    
$
1.87
  


4

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

   
March 31,
2007
  
September 30,
2007
  
       
(Unaudited)
  
       
ASSETS
Current assets:
              
 
Cash and cash equivalents
  
$
184,188
  
$
276,439
  
 
Accounts receivable from non-affiliates
    
158,770
    
191,962
  
 
Accounts receivable from affiliates
    
17,199
    
14,862
  
 
Inventories
    
157,870
    
176,459
  
 
Prepaid expenses and other
    
17,947
    
26,244
  
 
Total current assets
    
535,974
    
685,966
  
Investment in unconsolidated affiliates
    
46,828
    
54,314
  
Property and equipment – at cost:
              
 
Land and buildings
    
51,850
    
55,619
  
 
Aircraft and equipment
    
1,141,578
    
1,353,975
  
         
1,193,428
    
1,409,594
  
 
Less – Accumulated depreciation and amortization
    
(301,520
)
  
(309,726
)
         
891,908
    
1,099,868
  
Goodwill 
    
20,368
    
29,302
  
Other assets 
    
10,725
    
29,793
  
   
$
1,505,803
  
$
1,899,243
  
               
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
              
 
Accounts payable
  
$
42,343
  
$
49,055
  
 
Accrued wages, benefits and related taxes 
    
38,281
    
39,414
  
 
Income taxes payable
    
4,377
    
9,489
  
 
Other accrued taxes
    
9,084
    
5,118
  
 
Deferred revenues
    
16,283
    
14,703
  
 
Accrued maintenance and repairs
    
12,309
    
13,556
  
 
Other accrued liabilities
    
22,828
    
27,167
  
 
Deferred taxes
    
17,611
    
18,479
  
 
Short-term borrowings and current maturities of long-term debt
    
4,852
    
6,764
  
 
Total current liabilities 
    
167,968
    
183,745
  
Long-term debt, less current maturities
    
254,230
    
550,571
  
Accrued pension liabilities
    
113,069
    
112,121
  
Other liabilities and deferred credits
    
17,345
    
15,312
  
Deferred taxes
    
76,089
    
89,914
  
Minority interest
    
5,445
    
5,258
  
Commitments and contingencies
              
Stockholders’ investment:
              
 
5.50% mandatory convertible preferred stock 
    
222,554
    
222,554
  
 
Common stock
    
236
    
237
  
 
Additional paid-in capital 
    
169,353
    
174,383
  
 
Retained earnings
    
515,589
    
565,886
  
 
Accumulated other comprehensive loss
    
(36,075
)
  
(20,738
)
     
871,657
    
942,322
  
   
$
1,505,803
  
$
1,899,243
  


5


BRISTOW GROUP INC. AND SUBSIDIARIES
CORPORATE ITEMS AFFECTING THE COMPARABILITY OF RESULTS
(In thousands, except per share amounts)
(Unaudited)

 
Three Months Ended September 30,
  
 
2006
  
2007
  
 
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
       
Investigations:
                                    
SEC (1) 
$
—
  
$
—
  
$
—
  
$
1,000
  
$
650
  
$
0.02
  
DOJ (2)
  
(282
)
  
(183
)
  
(0.01
)
  
(488
)
  
(317
)
  
(0.01
)
Tax contingency related items (3)
  
—
    
700
    
0.03
    
5,396
    
3,407
    
0.11
  
7 ½% Senior Notes due 2017 (4)
  
—
    
—
    
—
    
(2,248
)
  
(1,461
)
  
(0.05
)
Foreign currency transaction gains (losses) (5)
  
(1,333
)
  
(867
)
  
(0.04
)
  
334
    
217
    
0.01
  
Preferred Stock (6) 
  
291
    
189
    
(0.01
)
  
—
    
—
    
(0.30
)
Total
$
(1,324
)
$
(161
)
$
(0.03
)
$
3,994
  
$
2,496
  
$
(0.22
)

 
Six Months Ended September 30,
  
 
2006
  
2007
  
 
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
   
 
  
Investigations:
                                    
SEC (1) 
$
—
  
$
—
  
$
—
  
$
1,000
  
$
650
  
$
0.02
  
DOJ (2) 
  
(873
)
  
(567
)
  
(0.02
)
  
(488
)
  
(317
)
  
(0.01
)
Tax contingency related items (3)
  
—
    
1,500
    
0.06
    
5,396
    
4,407
    
0.15
  
7 ½% Senior Notes due 2017 (4)
  
—
    
—
    
—
    
(2,605
)
  
(1,693
)
  
(0.06
)
Foreign currency transaction gains (losses) (5)
  
(6,142
)
  
(3,993
)
  
(0.17
)
  
735
    
478
    
0.02
  
Preferred Stock (6)                                    
  
291
    
189
    
(0.01
)
  
826
    
537
    
(0.50
)
Total                                                           
$
(6,724
)
$
(2,871
)
$
(0.14
)
$
4,864
  
$
4,062
  
$
(0.38
)
______
 
(1)  
Represents a reversal of previously accrued costs incurred in conjunction with the SEC investigation regarding findings from the internal review initiated by the Audit Committee of our board of directors in fiscal year 2005 of certain payments made by two of our affiliated entities in a foreign country.  These costs were included in general & administrative costs in our consolidated statements of income.

(2)  
Represents legal and other professional fees incurred in connection with a document subpoena received from the Antitrust Division of the Department of Justice (“DOJ”) in June 2005, which related to a grand jury investigation of potential antitrust violations among providers of helicopter transportation services in the U.S. Gulf of Mexico focusing on activities during the period from January 1, 2000 to June 13, 2005.  These costs are included in general & administrative costs in our consolidated statements of income.

(3)  
Represents $5.4 million in reversal of accrual for sales tax contingency during the three and six months ended September 30, 2007 in Nigeria included in direct costs in our consolidated statements of income and a direct reduction in our provision for income taxes in our consolidated statements of income for income tax contingency items, which represents the remainder of the impact of net income and diluted earnings per share.

(4)  
Represents the effect on interest expense, net of interest income from invested proceeds, resulting from the issuance of 7 ½% Senior Notes due 2017 in June 2007.

(5)  
Represents foreign currency transaction gains and losses resulting from changes in exchange rates during the applicable periods.  The effects of these foreign currency transaction gains and losses were offset to a large extent by corresponding charges or benefits in the cumulative translation adjustment in stockholders’ investment with no overall economic effect.  These amounts are included in other income (expense), net in our consolidated statements of income.

(6)  
Represents the effect of the preferred stock offering completed in September and October 2006.  The net income effect results from interest income earned on remaining cash proceeds generated from the offering.  Diluted earnings per share for the three and six months ended September 30, 2007 and 2006 was reduced by the effect of the inclusion of weighted average shares resulting from the assumed conversion of the preferred stock at the conversion rate that results in the most dilution, partially offset by the impact of higher interest income.


6

BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)

   
Three Months Ended
    
Six Months Ended
  
   
September 30,
    
September 30,
  
   
2006
    
2007
    
2006
    
2007
  
 
(Unaudited)
Flight hours (excludes Bristow Academy and 
     unconsolidated affiliates):
                                
Helicopter Services:
                                
North America 
    
41,148
      
39,623
      
83,757
      
79,894
  
South and Central America 
    
9,631
      
10,810
      
18,916
      
22,177
  
Europe
    
10,685
      
11,494
      
20,855
      
22,315
  
West Africa 
    
9,179
      
9,887
      
18,062
      
18,785
  
Southeast Asia 
    
3,063
      
3,644
      
6,269
      
6,988
  
Other International  
    
2,426
      
2,177
      
4,478
      
4,724
  
Consolidated total  
    
76,132
      
77,635
      
152,337
      
154,883
  
   
Gross revenue:
                                
Helicopter Services:
                                
North America 
  
$
62,504
    
$
62,059
    
$
125,872
    
$
122,998
  
South and Central America    
    
13,137
      
16,951
      
26,149
      
32,987
  
Europe  
    
72,706
      
93,459
      
144,687
      
176,816
  
West Africa  
    
31,210
      
45,799
      
62,946
      
79,082
  
Southeast Asia 
    
17,626
      
23,858
      
34,666
      
46,350
  
Other International    
    
12,184
      
12,046
      
21,139
      
23,501
  
EH Centralized Operations   
    
3,538
      
5,331
      
6,612
      
12,136
  
Bristow Academy   
    
—
      
3,228
      
—
      
6,247
  
Intrasegment eliminations  
    
(3,276
)
    
(3,005
)
    
(6,136
)
    
(9,240
)
Total Helicopter Services 
    
209,629
      
259,726
      
415,935
      
490,877
  
Production Management Services 
    
17,784
      
16,030
      
35,468
      
32,573
  
Corporate  
    
—
      
—
      
(25
)
    
—
  
Intersegment eliminations  
    
(3,204
)
    
(2,420
)
    
(6,107
)
    
(5,112
)
Consolidated total                                                    
  
$
224,209
    
$
273,336
    
$
445,271
    
$
518,338
  

Operating income:
                                
Helicopter Services:
                                
North America 
  
$
7,107
    
$
10,869
    
$
16,340
    
$
21,583
  
South and Central America 
    
3,624
      
4,573
      
7,594
      
8,258
  
Europe
    
13,527
      
21,895
      
27,623
      
36,470
  
West Africa
    
2,848
      
15,492
      
7,181
      
18,289
  
Southeast Asia
    
3,210
      
5,107
      
5,645
      
9,234
  
Other International
    
3,771
      
1,781
      
5,287
      
4,046
  
EH Centralized Operations 
    
(2,584
)
    
(3,247
)
    
(4,351
)
    
(7,526
)
Bristow Academy 
    
—
      
(391
)
    
—
      
(482
)
Total Helicopter Services 
    
31,503
      
56,079
      
65,319
      
89,872
  
Production Management Services 
    
1,394
      
870
      
2,807
      
1,959
  
Gain (loss) on disposal of assets 
    
3,667
      
(754
)
    
4,665
      
(170
)
Corporate
    
(5,703
)
    
(5,604
)
    
(10,870
)
    
(11,196
)
Consolidated total                                                  
  
$
30,861
    
$
50,591
    
$
61,921
    
$
80,465
  

Operating margin:
                        
Helicopter Services:
                        
North America 
  
11.4
%
  
17.5
%
  
13.0
%
  
17.5
%
South and Central America 
  
27.6
%
  
27.0
%
  
29.0
%
  
25.0
%
Europe
  
18.6
%
  
23.4
%
  
19.1
%
  
20.6
%
West Africa 
  
9.1
%
  
33.8
%
  
11.4
%
  
23.1
%
Southeast Asia 
  
18.2
%
  
21.4
%
  
16.3
%
  
19.9
%
Other International  
  
31.0
%
  
14.8
%
  
25.0
%
  
17.2
%
EH Centralized Operations  
  
(73.0
)%
(60.9
)%
(65.8
)%
(62.0
)%
Bristow Academy  
  
N/A
    
(12.1
)%
N/A
    
(7.7
)%
Total Helicopter Services 
  
15.0
%
  
21.6
%
  
15.7
%
  
18.3
%
Production Management Services 
  
7.8
%
  
5.4
%
  
7.9
%
  
6.0
%
Consolidated total   
  
13.8
%
  
18.5
%
  
13.9
%
  
15.5
%


7