Bristow Group Reports Financial Results For Its 2015 Fiscal Fourth Quarter And Year Ended March 31, 2015

May 20, 2015 5:05 PM

HOUSTON, May 20, 2015 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported net income for the March 2015 fiscal fourth quarter of $15.1 million, or $0.43 per diluted share, compared to net income of $30.3 million, or $0.83 per diluted share, in the same period a year ago.

Adjusted net income, which excludes special items and asset disposition effects, decreased 35.3% to $31.8 million, or $0.91 per diluted share, for the March 2015 quarter, compared to $49.1 million, or $1.35 per diluted share, in the March 2014 quarter.

Operating revenue was $418.9 million for the March 2015 quarter compared to $404.6 million a year ago, an increase of 3.5%, driven by improvements in our Australia, North America and Europe Business Units. Adjusted earnings before interest, taxes, depreciation, amortization and rent ("adjusted EBITDAR"), which also excludes special items and asset disposition effects, was $126.3 million for the March 2015 quarter compared to $122.9 million in the same period a year ago, an increase of 2.8%. Results for the March 2015 quarter were significantly impacted by changes in foreign exchange rates of $12.9 million, primarily related to the Brazilian real, which decreased diluted earnings per share by $0.29, on an adjusted and unadjusted basis.

"Fiscal 2015 was a successful fiscal year in terms of operational performance, with the Bristow team remaining focused on what is vital: the safety and efficiency of our client's personnel and business," said Jonathan Baliff, President and Chief Executive Officer of Bristow Group. "Despite the headwinds that emerged during the second half of our fiscal year, we delivered revenue growth, and through the disciplined efforts of our employees, we proactively implemented cost and capital reductions that created FY15's strong Bristow Value Added ("BVA"), adjusted EBITDAR and operating cash flow. Bristow's performance in the face of this downturn demonstrates the uniqueness of our business model and balance sheet strength, but more importantly the resilience of the Bristow Team."

"We will continue to invest in our future and position Bristow to capitalize on opportunities that emerge, while committing to a balanced return for our shareholders such as our dividend which has more than doubled since its initiation in 2011," added Mr. Baliff.

FISCAL YEAR 2015 RESULTS

  • Operating revenue increased 13.9% to $1.7 billion compared to $1.5 billion a year ago. Large AirCraft Equivalent ("LACE") increased from 158 to 166 while our LACE rate decreased slightly from $9.34 million to $9.21 million during fiscal year 2015.
  • GAAP net income decreased 54.9% to $84.3 million, or $2.37 per diluted share, from $186.7 million, or $5.09 per diluted share, for fiscal year 2014 impacted by a higher gain on sale of unconsolidated affiliates in fiscal year 2014 and a higher loss on disposal of assets, primarily due to non-cash impairment charges related to aircraft of $36.1 million, in fiscal year 2015.
  • Adjusted net income for fiscal year 2015 decreased 17.9% to $134.0 million, or $3.77 per diluted share, from $163.2 million, or $4.45 per diluted share, in the fiscal year ended March 31, 2014.
  • Results for fiscal year 2015 were significantly impacted by changes in foreign exchange rates of $39.4 million, primarily related to the Brazilian real, which decreased diluted earnings per share by $0.88 for the period, on an adjusted and unadjusted basis.
  • In addition to the unfavorable impact of changes in foreign exchange rates, results for fiscal year 2015 were significantly impacted by:
    • An increase in general and administrative expense of $54.3 million driven by higher compensation costs of $20.1 million primarily related to improved BVA year-over-year and stock price performance versus our peer group, and higher professional fees of $13.1 million related to ongoing Operations Transformation and other initiatives,
    • A loss on disposal of assets of $35.8 million (primarily due to non-cash impairment charges related to aircraft of $36.1 million) and GAAP non-cash inventory impairment charges of $7.2 million in fiscal year 2015, and
    • Additional depreciation expense related to fleet changes of $10.4 million.
  • We continued to see top line strength in our operations driving an improvement in adjusted EBITDAR of 9.3% to $473.8 million in the current fiscal year from $433.7 million in the prior fiscal year.
  • In terms of cash generation from our operations and management of our capital, net cash provided by operating activities was $253.2 million for fiscal year 2015 compared to $232.1 million for the prior fiscal year. Our total liquidity, which includes cash on hand and availability under our revolving credit facility, was $369.9 million as of March 31, 2015 compared to $529.9 million as of March 31, 2014. The decrease in liquidity year over year primarily related to significant cash expenditures primarily for growth totaling $601.8 million in fiscal year 2015.
  • Our net income and diluted earnings per share were also impacted by an increase in pre-tax rent expense of $59.0 million for fiscal year 2015 compared to the prior year. These increases in rent expense resulted from an increase in the number of leased aircraft compared to the prior fiscal year.

FOURTH QUARTER FISCAL YEAR 2015 RESULTS

  • Operating revenue increased 3.5% to $418.9 million compared to $404.6 million in the March 2014 quarter.
  • Operating income decreased 41.6% to $27.7 million compared to $47.4 million in the March 2014 quarter.
  • GAAP net income decreased 50.3% to $15.1 million, or $0.43 per diluted share, compared to $30.3 million, or $0.83 per diluted share, in the March 2014 quarter.
  • Results for the March 2015 quarter were significantly impacted by changes in foreign exchange rates of $12.9 million, primarily related to the Brazilian real, which decreased diluted earnings per share by $0.29 for the period, on an adjusted and unadjusted basis.
  • In addition to the unfavorable impact of changes in foreign exchange rates, GAAP results for the March 2015 quarter were significantly impacted by:
    • A loss on disposal of assets of $10.3 million (including non-cash impairment charges related to aircraft of $7.3 million), and
    • Additional depreciation expense related to fleet changes of $10.4 million.
  • Despite the impact of changes in foreign exchange rates, adjusted EBITDAR improved 2.8% to $126.3 million for the March 2015 quarter from $122.9 million for the March 2014 quarter primarily as a result of the following:
    • The startup of new contracts in our Australia Business Unit and the addition of Airnorth,
    • The proactive cost reduction efforts realized by our West Africa Business Unit, and
    • A favorable shift in the mix to larger aircraft under contract and improved utilization that benefited our North America Business Unit.
  • Our net income and diluted earnings per share were also impacted by an increase in pre-tax rent expense of $18.8 million for the March 2015 quarter compared to the prior year period. These increases in rent expense resulted from an increase in the number of leased aircraft compared to the prior fiscal year.

FOURTH QUARTER FISCAL YEAR 2015 BUSINESS UNIT RESULTS

Europe Business Unit

Operating revenue for the March 2015 quarter improved in our Europe Business Unit compared to the prior year quarter primarily due to reporting a full quarter of Eastern Airways results and increased activity in Norway. Adjusted EBITDAR margin decreased to 29.9% in the March 2015 quarter compared to 37.3% in the March 2014 quarter primarily due to the absence of $8.5 million in credits for maintenance expense from original equipment manufacturers that were recognized in the March 2014 quarter. Also negatively impacting adjusted EBITDAR for the March 2015 quarter was a $7.1 million unfavorable impact of changes in foreign exchange rates which was the primary driver of a sequential decline in the adjusted EBITDAR margin from 33.1% in the December 2014 quarter to 29.9% in the March 2015 quarter.

West Africa Business Unit

Operating revenue decreased by 10.0% in our West Africa Business Unit for the March 2015 quarter compared to the March 2014 quarter due to reduced activity. Adjusted EBITDAR increased by 29.3% compared to the March 2014 quarter and adjusted EBITDAR margin increased to 47.7% for the March 2015 quarter compared to 33.2% for the March 2014 quarter. Adjusted EBITDAR and adjusted EBITDAR margin benefited from cost reductions and efficiency gains realized in our operations. Also impacting adjusted EBITDAR and adjusted EBITDAR margin for the March 2015 quarter was a $2.6 million favorable impact of changes in foreign exchange rates. Sequentially, adjusted EBITDAR margin increased from a 34.6% margin in the December 2014 quarter primarily due to the cost reduction efforts.

North America Business Unit

The North America Business Unit realized increases in operating revenue, adjusted EBITDAR and adjusted EBITDAR margin in the March 2015 quarter compared to the prior year quarter due to an increase in the number of large aircraft on contract and improved utilization. Adjusted EBITDAR and adjusted EBITDAR margin improved to $28.2 million and 48.3%, respectively, in the March 2015 quarter compared to $19.7 million and 35.4%, respectively, in the March 2014 quarter. Sequentially, adjusted EBITDAR margin improved from 40.0% in the December 2014 quarter.

Australia Business Unit

The Australia Business Unit realized increases in operating revenue, adjusted EBITDAR and adjusted EBITDAR margin compared to the prior year quarter primarily as a result of new client contracts and the acquisition of Airnorth in January 2015. Airnorth contributed $11.4 million of operating revenue and $2.1 million of adjusted EBTIDAR during the March 2015 quarter. Operating revenue increased to $62.9 million in the March 2015 quarter from $40.6 million in the March 2014 quarter. Adjusted EBITDAR and adjusted EBITDAR margin increased to $17.6 million and 27.9%, respectively, from $9.7 million and 24.0%, respectively, in the March 2014 quarter. Sequentially, adjusted EBITDAR margin improved from 25.4% in the December 2014 quarter primarily due to the contribution of new contracts.

Other International Business Unit

Operating revenue for our Other International Business Unit compared to the prior year quarter decreased primarily due to the end of contracts in Malaysia, Brazil and Trinidad, partially offset by a change in aircraft mix in Trinidad. Adjusted EBITDAR and adjusted EBITDAR margin for the March 2015 quarter decreased to $7.5 million and 23.6%, respectively, compared to $20.2 million and 53.3%, respectively, in the March 2014 quarter, primarily due to a $12.6 million unfavorable impact of changes in foreign currency rates on Líder, our unconsolidated affiliate in Brazil. Sequentially, adjusted EBITDAR margin increased from 20.7% in the December 2014 quarter.

CHANGES TO BUSINESS UNITS

Effective April 1, 2015, we reorganized our global operations from five business units to four regions as follows: Africa, Americas, Asia Pacific and Europe Caspian. The goal of these changes is to streamline and standardize our business, simplify our operating model, reduce costs and support consistent and faster response to clients globally. We believe the new structure will allow us to respond to market opportunities faster and execute our growth strategy more efficiently.

The Africa region will comprise all our operations and affiliates on the African continent, including Nigeria, Tanzania and Egypt.

The Americas region will comprise all our operations and affiliates in North America and South America, including Brazil, Canada, Trinidad and the U.S. Gulf of Mexico.

The Asia Pacific region will comprise all our operations and affiliates in Australia and Southeast Asia, including Malaysia and Sakhalin.

The Europe Caspian region will comprise all our operations and affiliates in Europe and Central Asia, including Norway, the U.K. and Turkmenistan.

Our historical business unit operating results will be recast based on the new region structure beginning with the quarter ending June 30, 2015.

DIVIDEND

On May 15, 2015, our Board of Directors approved our seventeenth consecutive quarterly dividend. This dividend of $0.34 per share will be paid on June 18, 2015 to shareholders of record on June 5, 2015. Based on shares outstanding as of March 31, 2015, the total quarterly dividend payment will be approximately $11.8 million.

GUIDANCE

"Our fiscal year 2015 earnings performance was materially impacted by the strength of the U.S. dollar, which reduced our adjusted earnings per share by $0.88, the majority of which came from the weakness in the Brazilian real and is non-cash. A large portion of the negative impact occurred in the fourth fiscal quarter," said John Briscoe, Senior Vice President and Chief Financial Officer of Bristow Group. "We generated very strong and improving operating cash flow and also created value for our shareholders by delivering $100 million of BVA during fiscal 2015. Impacts from the oil and gas downturn materialized in our fourth quarter; however good cost control resulted in a sequential improvement in adjusted EBITDAR margin for the quarter."

Today, we are announcing our adjusted diluted earnings per share guidance range for fiscal year 2016 of $3.90 to $4.40.

"The fiscal 2016 energy industry environment is presenting more challenges and uncertainties for the oil and gas portion of our business and impacts our full year adjusted EPS guidance range. However, our business model, which is strongly tied to offshore production combined with the start-up of the U.K. SAR contract and our growing fixed-wing operations, supports our expectation of average adjusted earnings growth of 10%-15% per year over the medium and long term," added Mr. Briscoe.

As a reminder, our adjusted diluted earnings per share guidance excludes the effect of special items and asset dispositions because their timing and amounts are more variable and less predictable. Further, this guidance is based on foreign exchange rates as of March 31, 2015 and assumes the rates will remain unchanged. In providing this guidance, we have not included the impact of any changes in accounting standards or significant acquisitions and divestitures. Events or other circumstances that we do not currently anticipate or cannot predict, including changes in the market and industry, could result in earnings per share for fiscal year 2016 that are significantly above or below this guidance. Factors that could cause such changes are described below under the Forward-Looking Statements Disclosure and the Risk Factors in our annual report on Form 10-K for the fiscal year ended March 31, 2015.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. EDT (9:00 a.m. CDT) on Thursday, May 21, 2015 to review financial results for the fiscal year 2015 and fourth quarter ended March 31, 2015. This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com. The conference call can be accessed as follows:

Via Webcast:

  • Visit Bristow Group's investor relations Web page at www.bristowgroup.com
  • Live: Click on the link for "Bristow Group Fiscal 2015 Fourth Quarter Earnings Conference Call"
  • Replay: A replay via webcast will be available approximately one hour after the call's completion and will be accessible for approximately 90 days

Via Telephone within the U.S.:

  • Live: Dial toll free 1-877-404-9648
  • Replay: A telephone replay will be available through May 28, 2015 and may be accessed by calling toll free 1-877-660-6853, passcode: 13606746#

Via Telephone outside the U.S.:

  • Live: Dial 1-412-902-0030
  • Replay: A telephone replay will be available through May 28, 2015 and may be accessed by calling toll free 1-201-612-7415, passcode: 13606746#

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 and one of two helicopter service providers to the offshore energy industry with global operations. The Company has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, 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 earnings guidance and earnings growth, expected contract revenue, capital deployment strategy, operational and capital performance, shareholder return, liquidity, market and industry conditions. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Risks and uncertainties include, without limitation: fluctuations in the demand for our services; fluctuations in worldwide prices of and supply and demand for oil and natural gas; fluctuations in levels of oil and natural gas production, exploration and development activities; the impact of competition; actions by clients; the risk of reductions in spending on helicopter services by governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange rates and controls; risks associated with international operations; operating risks inherent in our business, including the possibility of declining safety performance; general economic conditions including the capital and credit markets; our ability to obtain financing; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our ability to re-deploy our aircraft to regions with greater demand; our ability to acquire additional aircraft and dispose of older aircraft through sales into the aftermarket; the possibility that we do not achieve the anticipated benefit of our fleet investment and Operational Excellence programs; availability of employees with the necessary skills; and political instability, war or acts of terrorism in any of the countries in which we operate. 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 annual report on Form 10-K for the fiscal year ended March 31, 2015. 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)

BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages)(Unaudited)

Three Months Ended

March 31,

Fiscal Year Ended

March 31,

2015

2014

2015

2014

Gross revenue:

Operating revenue from non-affiliates

$

396,801

$

382,363

$

1,639,263

$

1,423,653

Operating revenue from affiliates

22,075

22,222

87,724

92,673

Reimbursable revenue from non-affiliates

31,479

36,340

131,682

153,180

Reimbursable revenue from affiliates

76

450,355

440,925

1,858,669

1,669,582

Operating expense:

Direct cost

283,508

270,092

1,174,991

1,041,575

Reimbursable expense

30,100

34,823

124,566

144,557

Impairment of inventories

10,540

7,167

12,669

Depreciation and amortization

37,129

25,645

114,293

95,977

General and administrative

59,471

64,079

254,158

199,814

410,208

405,179

1,675,175

1,494,592

Gain (loss) on disposal of assets

(10,255)

81

(35,849)

(722)

Earnings from unconsolidated affiliates, net of losses

(2,190)

11,594

(1,771)

12,709

Operating income

27,702

47,421

145,874

186,977

Interest expense, net

(7,679)

(7,805)

(29,354)

(43,218)

Extinguishment of debt

(2,591)

Gain on sale of unconsolidated affiliate

3,921

103,924

Other income (expense), net

175

(2,117)

(6,377)

(2,692)

Income before provision for income taxes

20,198

37,499

111,473

244,991

Provision for income taxes

(4,390)

(5,530)

(22,766)

(57,212)

Net income

15,808

31,969

88,707

187,779

Net income attributable to noncontrolling interests

(731)

(1,651)

(4,407)

(1,042)

Net income attributable to Bristow Group

$

15,077

$

30,318

$

84,300

$

186,737

Earnings per common share:

Basic

$

0.43

$

0.84

$

2.40

$

5.15

Diluted

$

0.43

$

0.83

$

2.37

$

5.09

Non-GAAP measures:

Adjusted operating income

$

49,261

$

68,401

$

210,564

$

233,459

Adjusted operating margin

11.8

%

16.9

%

12.2

%

15.4

%

Adjusted EBITDAR

$

126,330

$

122,923

$

473,824

$

433,656

Adjusted EBITDAR margin

30.2

%

30.4

%

27.4

%

28.6

%

Adjusted net income

$

31,804

$

49,129

$

133,963

$

163,176

Adjusted diluted earnings per share

$

0.91

$

1.35

$

3.77

$

4.45

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

March 31,

2015

2014

ASSETS

Current assets:

Cash and cash equivalents

$

104,146

$

204,341

Accounts receivable from non-affiliates

250,610

292,650

Accounts receivable from affiliates

8,008

4,793

Inventories

147,169

137,463

Assets held for sale

57,827

29,276

Prepaid expenses and other current assets

70,091

53,084

Total current assets

637,851

721,607

Investment in unconsolidated affiliates

216,376

262,615

Property and equipment – at cost:

Land and buildings

171,959

145,973

Aircraft and equipment

2,493,869

2,646,150

2,665,828

2,792,123

Less – Accumulated depreciation and amortization

(508,727)

(523,372)

2,157,101

2,268,751

Goodwill

75,628

56,680

Other assets

143,764

88,604

Total assets

$

3,230,720

$

3,398,257

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:

Accounts payable

$

84,193

$

89,818

Accrued wages, benefits and related taxes

81,648

71,192

Income taxes payable

7,926

13,588

Other accrued taxes

13,335

9,302

Deferred revenue

36,784

31,157

Accrued maintenance and repairs

23,316

17,249

Accrued interest

12,831

16,157

Other accrued liabilities

82,605

45,853

Deferred taxes

17,704

12,372

Short-term borrowings and current maturities of long-term debt

18,730

14,207

Deferred sale leaseback advance

55,934

136,930

Total current liabilities

435,006

457,825

Long-term debt, less current maturities

845,692

827,095

Accrued pension liabilities

99,576

86,823

Other liabilities and deferred credits

39,782

78,126

Deferred taxes

165,655

169,519

Temporary equity

26,223

22,283

Stockholders' investment:

Common stock

376

373

Additional paid-in capital

781,837

762,813

Retained earnings

1,284,442

1,245,220

Accumulated other comprehensive loss

(270,329)

(156,506)

Treasury shares, at cost

(184,796)

(103,965)

Total Bristow Group stockholders' investment

1,611,530

1,747,935

Noncontrolling interests

7,256

8,651

Total stockholders' investment

1,618,786

1,756,586

Total liabilities and stockholders' investment

$

3,230,720

$

3,398,257

BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)(Unaudited)

Fiscal Year Ended

March 31,

2015

2014

Cash flows from operating activities:

Net income

$

88,707

$

187,779

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

114,293

95,977

Deferred income taxes

(7,457)

5,465

Write-off of deferred financing fees

660

12,733

Discount amortization on long-term debt

4,323

3,708

Loss on disposal of assets

35,849

722

Gain on sale of unconsolidated affiliate

(3,921)

(103,924)

Impairment of inventories

7,167

12,669

Extinguishment of debt

2,591

Stock-based compensation

16,353

15,433

Equity in earnings from unconsolidated affiliates less than (in excess of) dividends received

9,418

1,629

Tax benefit related to stock-based compensation

(1,550)

(5,723)

Increase (decrease) in cash resulting from changes in:

Accounts receivable

24,112

3,647

Inventories

(21,478)

12,824

Prepaid expenses and other assets

(25,485)

(3,149)

Accounts payable

(4,665)

(5,154)

Accrued liabilities

29,461

11,697

Other liabilities and deferred credits

(15,152)

(14,239)

Net cash provided by operating activities

253,226

232,094

Cash flows from investing activities:

Capital expenditures

(601,834)

(628,613)

Acquisitions, net of cash received

(20,303)

(39,850)

Proceeds from sale of unconsolidated affiliate

4,185

112,210

Proceeds from asset dispositions

414,859

289,951

Net cash used in investing activities

(203,093)

(266,302)

Cash flows from financing activities:

Proceeds from borrowings

454,393

533,064

Payment of contingent consideration

(6,000)

Debt issuance costs

(15,523)

Repayment of debt and debt redemption premiums

(460,274)

(512,492)

Proceeds from assignment of aircraft purchase agreements

106,113

Partial prepayment of put/call obligation

(59)

(57)

Acquisition of noncontrolling interest

(3,170)

(2,078)

Repurchase of common stock

(80,831)

(77,661)

Common stock dividends paid

(45,078)

(36,320)

Issuance of common stock

5,172

15,398

Tax benefit related to stock-based compensation

1,550

5,723

Net cash provided by (used in) financing activities

(128,297)

10,167

Effect of exchange rate changes on cash and cash equivalents

(22,031)

12,759

Net decrease in cash and cash equivalents

(100,195)

(11,282)

Cash and cash equivalents at beginning of period

204,341

215,623

Cash and cash equivalents at end of period

$

104,146

$

204,341

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

Three Months Ended

March 31,

Fiscal Year Ended

March 31,

2015

2014

2015

2014

Operating revenue:

Europe

$

177,212

$

170,715

$

779,009

$

622,684

West Africa

75,350

83,754

315,897

314,829

North America

58,321

55,560

234,218

229,064

Australia

62,894

40,586

209,020

148,731

Other International

31,826

37,973

135,752

133,794

Corporate and other

15,214

17,450

59,449

71,679

Intra-business unit eliminations

(1,941)

(1,453)

(6,358)

(4,455)

Consolidated

$

418,876

$

404,585

$

1,726,987

$

1,516,326

Operating income (loss):

Europe

$

16,065

$

32,021

$

125,016

$

114,729

West Africa

25,478

20,792

86,074

80,053

North America

17,537

8,302

52,943

32,255

Australia

(1,479)

762

6,017

5,523

Other International

2,364

19,481

18,609

33,769

Corporate and other

(22,008)

(34,018)

(106,936)

(78,630)

Gain (loss) on disposal of assets

(10,255)

81

(35,849)

(722)

Consolidated

$

27,702

$

47,421

$

145,874

$

186,977

Operating margin:

Europe

9.1

%

18.8

%

16.0

%

18.4

%

West Africa

33.8

%

24.8

%

27.2

%

25.4

%

North America

30.1

%

14.9

%

22.6

%

14.1

%

Australia

(2.4)

%

1.9

%

2.9

%

3.7

%

Other International

7.4

%

51.3

%

13.7

%

25.2

%

Consolidated

6.6

%

11.7

%

8.4

%

12.3

%

Adjusted EBITDAR:

Europe

$

53,061

$

63,606

$

255,506

$

216,283

West Africa

35,928

27,779

109,154

101,175

North America

28,164

19,663

94,101

73,528

Australia

17,567

9,737

52,596

29,111

Other International

7,515

20,246

35,620

63,778

Corporate and other

(15,905)

(18,108)

(73,153)

(50,219)

Consolidated

$

126,330

$

122,923

$

473,824

$

433,656

Adjusted EBITDAR margin:

Europe

29.9

%

37.3

%

32.8

%

34.7

%

West Africa

47.7

%

33.2

%

34.6

%

32.1

%

North America

48.3

%

35.4

%

40.2

%

32.1

%

Australia

27.9

%

24.0

%

25.2

%

19.6

%

Other International

23.6

%

53.3

%

26.2

%

47.7

%

Consolidated

30.2

%

30.4

%

27.4

%

28.6

%

Flight hours (excluding Bristow Academy and unconsolidated affiliates):

Europe

21,755

19,537

93,344

69,130

West Africa

9,327

10,984

40,958

45,581

North America

9,950

11,322

45,365

56,008

Australia

5,719

2,915

14,292

10,378

Other International

3,544

3,721

14,854

14,303

Consolidated

50,295

48,479

208,813

195,400

BRISTOW GROUP INC. AND SUBSIDIARIES AIRCRAFT COUNT As of March 31, 2015 (Unaudited)

Aircraft in Consolidated Fleet

Percentage

of FY2015

Operating

Revenue

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Unconsolidated

Affiliates (2)

Total (1)(2)

Total

Europe

45

%

12

67

30

109

109

West Africa

18

%

9

30

4

3

46

46

North America

14

%

29

23

16

68

68

Australia

12

%

2

8

17

13

40

40

Other International

8

%

29

8

37

130

167

Corporate and other

3

%

71

71

71

Total

100

%

40

102

112

71

46

371

130

501

Aircraft not currently in fleet: (3)

On order

8

37

45

Under option

14

16

30

(1)

Includes 12 aircraft held for sale and 119 leased aircraft as follows:

Held for Sale Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Total

Europe

2

2

West Africa

3

3

North America

3

3

Australia

Other International

4

4

Corporate and other

Total

10

2

12

Leased Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Total

Europe

5

36

13

54

West Africa

1

1

2

North America

1

13

5

19

Australia

2

2

8

4

16

Other International

Corporate and other

28

28

Total

3

21

50

28

17

119

(2)

The average age of our fleet, excluding training aircraft, was nine years as of March 31, 2015.

(3)

The 130 aircraft operated by our unconsolidated affiliates do not include those aircraft leased to us. Includes 59 helicopters (primarily medium) and 26 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Other International Business Unit.

(4)

This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.

Changes to Business Units

The following tables present our selected operating data for all four quarters within fiscal year ended March 31, 2015 for comparison purposes based on the new region reporting structure effective for fiscal year 2016 discussed above.

Three Months Ended

June 30,

2014

September 30,

2014

December 31,

2014

March 31,

2015

(in thousands, except flight hours and percentages)

(Unaudited)

Operating revenue:

Europe Caspian

$

207,004

$

211,516

$

195,617

$

179,701

Africa

84,572

84,763

86,330

80,340

Americas

90,421

88,678

88,380

86,028

Asia Pacific

54,469

55,034

59,211

68,884

Corporate and other

8,421

7,609

1,849

4,909

Intra-business unit eliminations

(7,552)

(7,142)

(1,069)

(986)

Consolidated

$

437,335

$

440,458

$

430,318

$

418,876

Operating income (loss):

Europe Caspian

$

42,195

$

40,627

$

28,550

$

17,171

Africa

17,626

19,667

26,379

28,086

Americas

26,658

13,566

19,774

19,178

Asia Pacific

3,330

2,461

5,264

1,400

Corporate and other

(25,227)

(32,384)

(44,720)

(27,879)

Gain (loss) on disposal of assets

610

127

(26,331)

(10,254)

Consolidated

$

65,192

$

44,064

$

8,916

$

27,702

Operating margin:

Europe Caspian

20.4

%

19.2

%

14.6

%

9.6

%

Africa

20.8

%

23.2

%

30.6

%

35.0

%

Americas

29.5

%

15.3

%

22.4

%

22.3

%

Asia Pacific

6.1

%

4.5

%

8.9

%

2.0

%

Consolidated

14.9

%

10.0

%

2.1

%

6.6

%

Adjusted EBITDAR:

Europe Caspian

$

70,543

$

70,707

$

64,107

$

55,339

Africa

21,872

26,023

29,785

39,077

Americas

40,081

27,799

33,233

34,822

Asia Pacific

12,820

12,508

14,511

20,142

Corporate and other

(17,693)

(24,968)

(32,580)

(23,050)

Consolidated

$

127,623

$

112,069

$

109,056

$

126,330

Adjusted EBITDAR margin:

Europe Caspian

34.1

%

33.4

%

32.8

%

30.8

%

Africa

25.9

%

30.7

%

34.5

%

48.6

%

Americas

44.3

%

31.3

%

37.6

%

40.5

%

Asia Pacific

23.5

%

22.7

%

24.5

%

29.2

%

Consolidated

29.2

%

25.4

%

25.3

%

30.2

%

Flight hours (excluding Bristow Academy and unconsolidated affiliates):

Europe Caspian

24,181

24,340

23,495

21,860

Africa

11,058

10,855

11,004

9,719

Americas

14,261

13,537

14,384

12,201

Asia Pacific

3,678

3,575

4,150

6,515

Consolidated

53,178

52,307

53,033

50,295

BRISTOW GROUP INC. AND SUBSIDIARIES GAAP RECONCILIATIONS (Unaudited)

These financial measures have not been prepared in accordance with generally accepted accounting principles ("GAAP") and have not been audited or reviewed by our independent auditor. These financial measures are therefore considered non-GAAP financial measures. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:

Three Months Ended

March 31,

Fiscal Year Ended

March 31,

2015

2014

2015

2014

(In thousands, except per share amounts and percentages)

Adjusted operating income

$

49,261

$

68,401

$

210,564

$

233,459

Gain (loss) on disposal of assets

(10,255)

81

(35,849)

(722)

Special items

(11,304)

(21,061)

(28,841)

(45,760)

Operating income

$

27,702

$

47,421

$

145,874

$

186,977

Adjusted EBITDAR

$

126,330

$

122,923

$

473,824

$

433,656

Gain (loss) on disposal of assets

(10,255)

81

(35,849)

(722)

Special items

(925)

(20,485)

(17,132)

58,740

Depreciation and amortization

(37,129)

(25,645)

(114,293)

(95,977)

Rent expense

(49,928)

(31,139)

(164,767)

(105,769)

Interest expense

(7,895)

(8,237)

(30,310)

(44,938)

Provision for income taxes

(4,390)

(5,529)

(22,766)

(57,211)

Net income

$

15,808

$

31,969

$

88,707

$

187,779

Adjusted income tax expense

$

(9,222)

$

(7,700)

$

(37,123)

$

(36,064)

Tax (expense) benefit on gain (loss) on disposal of asset

2,168

(21)

7,321

148

Tax benefit (expense) on special items

2,664

2,190

7,036

(21,296)

Net income attributable to Bristow Group

$

(4,390)

$

(5,531)

$

(22,766)

$

(57,212)

Adjusted effective tax rate (1)

22.1

%

13.2

%

21.2

%

18.0

%

Effective tax rate (1)

21.7

%

14.7

%

20.4

%

23.4

%

Adjusted net income

$

31,804

$

49,129

$

133,963

$

163,176

Gain (loss) on disposal of assets

(8,087)

60

(28,528)

(574)

Special items

(8,640)

(18,871)

(21,135)

24,135

Net income attributable to Bristow Group

$

15,077

$

30,318

$

84,300

$

186,737

Adjusted diluted earnings per share

$

0.91

$

1.35

$

3.77

$

4.45

Gain (loss) on disposal of assets

(0.23)

(0.80)

(0.02)

Special items

(0.25)

(0.52)

(0.59)

0.66

Diluted earnings per share

0.43

0.83

2.37

5.09

(1)

Effective tax rate is calculated by dividing income tax expense by pretax net income. Adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted pretax net income.

Three Months Ended

March 31, 2015

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Fleet changes (1)

$

(10,379)

$

$

(7,992)

$

(0.23)

Severance costs (2)

(925)

(925)

(648)

(0.02)

$

(11,304)

$

(925)

$

(8,640)

(0.25)

Three Months Ended

March 31, 2014

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Impairment of inventories (3)

$

(10,540)

$

(10,540)

$

(8,379)

$

(0.23)

Restructuring items (4)

(771)

(771)

(3,126)

(0.09)

Líder taxes (5)

4,233

4,233

2,751

0.08

Mexico goodwill impairment (6)

(576)

(374)

(0.01)

Nigeria fire (7)

(8,569)

(8,569)

(6,598)

(0.18)

CEO succession planning and officer separation (8)

(4,838)

(4,838)

(3,145)

(0.09)

Total special items

$

(21,061)

$

(20,485)

$

(18,871)

(0.52)

Fiscal Year Ended

March 31, 2015

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Gain on sale of unconsolidated affiliate (9)

$

$

3,921

$

2,549

$

0.07

North America restructuring (10)

(1,611)

(1,611)

(1,047)

(0.03)

CEO succession (11)

(5,501)

(5,501)

(3,576)

(0.10)

Impairment of inventories (3)

(7,167)

(7,167)

(5,734)

(0.16)

Repurchase of 6¼% Senior Notes (12)

(2,591)

(2,113)

(0.06)

Accrued maintenance cost reversal (13)

813

813

642

0.02

Accounting correction (14)

(4,071)

(4,071)

(3,216)

(0.09)

Fleet changes (1)

(10,379)

(7,992)

(0.22)

Severance costs (2)

(925)

(925)

(648)

(0.02)

Total special items

$

(28,841)

$

(17,132)

$

(21,135)

(0.59)

Fiscal Year Ended

March 31, 2014

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Gain on sale of unconsolidated affiliate (15)

$

$

103,924

$

67,897

$

1.85

Cancellation of potential financing (16)

(8,276)

(0.23)

Impairment of inventories (3)

(12,669)

(12,669)

(10,071)

(0.27)

Restructuring items (4)

(5,521)

(5,521)

(6,466)

(0.18)

Líder taxes (5)

(13,587)

(13,587)

(8,832)

(0.24)

Mexico goodwill impairment (6)

(576)

(374)

(0.01)

Nigeria fire (7)

(8,569)

(8,569)

(6,598)

(0.18)

CEO succession planning and officer separation (8)

(4,838)

(4,838)

(3,145)

(0.09)

Total special items

$

(45,760)

$

58,740

$

24,135

0.66

(1)

Relates to additional depreciation expense due to fleet changes.

(2)

Relates to severance expense included in direct costs and general and administrative expense in our West Africa Business Unit.

(3)

Relates to the increase in inventory charges as a result of our review of excess inventory on aircraft model types we ceased to own or plan to dispose of during the next two years. The fiscal year 2015 impairment charge related primarily to spare parts held for a large aircraft model where we decided to accelerate removal from our fleet into fiscal year 2016. The fiscal year 2014 inventory impairment primarily relates to a medium aircraft type that is being replaced by newer technology models.

(4)

Relates to charges of $0.8 million and $3.4 million for the three months and fiscal year ended March 31, 2014, respectively, associated with the restructuring of our North America Business Unit and planned closure of our Alaska operations which related primarily to employee severance and retention costs, a charge of $2.1 million for the fiscal year ended March 31, 2014 associated with severance costs in the Southern North Sea related to the termination of a contract and $2.6 million of tax expense for the three months and fiscal year ended March 31, 2014 related to an internal reorganization.

(5)

Relates to higher earnings of $4.2 million from Líder from an adjustment to tax charges recorded during the December 2013 quarter and a tax indemnity payment from the other Líder shareholders resulting from a tax amnesty payment Líder made to the Brazilian government. During fiscal year ended March 31, 2014, we recorded $13.6 million of lower earnings from Líder due to additional tax charges resulting primarily from the tax amnesty payment Líder made to the government of Brazil.

(6)

Relates to an impairment of goodwill in Mexico as all our contracts in Mexico have ended.

(7)

Relates to higher insurance expense due to a fire in Nigeria.

(8)

Relates to CEO succession planning of $1.9 million and officer separation costs of $2.9 million.

(9)

Relates to a gain resulting from the sale of our 50% interest in HCA for £2.7 million, or approximately $4.2 million.

(10)

Relates to a charges associated with the restructuring of our North America Business Unit and planned closure of our Alaska operations which related primarily to employee severance and retention costs.

(11)

Relates to CEO succession cost.

(12)

Relates to premium and fees associated with the repurchase of some of our 6 ¼% Senior Notes due 2022.

(13)

Relates to the reversal maintenance costs associated with a prior obligation to repair certain aircraft in our fleet we ultimately did not incur.

(14)

Relates to an accounting correction that impacted net income by $4.1 million for fiscal year 2015.

(15)

Relates to a gain resulting from the sale of our 50% interest in the FB Entities.

(16)

Relates to a charge to interest expense of $12.7 million, resulting from the write-off of unamortized deferred financing fees related to a potential financing in connection with our bid to provide SAR services in the U.K. During the June 2013 quarter, we increased our borrowing capacity on our revolving credit facility from $200 million to $350 million and cancelled this potential financing.

Contact: Linda McNeill Investor Relations (713) 267-7622

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bristow-group-reports-financial-results-for-its-2015-fiscal-fourth-quarter-and-year-ended-march-31-2015-300086857.html

SOURCE Bristow Group Inc.

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