Bristow Group Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 2, 2018

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Exhibit 99.1
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News Release


FOR IMMEDIATE RELEASE

Bristow Group Reports First Quarter Fiscal Year 2019 Results

HOUSTON, August 2, 2018 – Bristow Group Inc. (NYSE: BRS) today reported the following results for the three months ended June 30, 2018. All amounts shown are dollar amounts in thousands unless otherwise noted:
 
 
Three Months Ended 
 June 30,
 

 
 
2018
 
2017
 
% Change
Operating revenue
 
$
350,987

 
$
339,729

 
3.3
 %
Net loss attributable to Bristow Group
 
(32,108
)
 
(55,275
)
 
41.9
 %
Diluted loss per share
 
(0.90
)
 
(1.57
)
 
42.7
 %
Adjusted EBITDA (1)
 
26,769

 
15,203

 
76.1
 %
Adjusted net loss (1)
 
(29,123
)
 
(29,138
)
 
0.1
 %
Adjusted diluted loss per share (1)
 
(0.82
)
 
(0.83
)
 
1.2
 %
Operating cash flow
 
(44,119
)
 
(51,179
)
 
13.8
 %
Capital expenditures
 
8,895

 
12,553

 
(29.1
)%
Rent expense
 
50,081

 
58,675

 
(14.6
)%
 
 
June 30, 
 2018
 
March 31,  
 2018
 
% Change
Cash
 
$
316,550

 
$
380,223

 
(16.7
)%
Undrawn borrowing capacity on ABL Facility (2)
 
25,216

 
—

 
*

Total liquidity
 
$
341,766

 
$
380,223

 
(10.1
)%
______________ 
* percentage change too large to be meaningful or not applicable
(1) 
A full reconciliation of non-GAAP financial measurements is included at the end of this news release
(2) 
Our new $75 million Asset-Backed Revolving Credit Facility (“ABL Facility”) closed on April 17, 2018 and, therefore, availability under such facility is not included in liquidity as of March 31, 2018.
“The New Bristow delivered improved revenue and adjusted EBITDA performance both compared to the prior year’s first fiscal quarter and sequentially, led by our Search and Rescue and fixed-wing businesses in the U.K. and higher adjusted EBITDA in Australia,” said Jonathan Baliff, President and Chief Executive Officer of Bristow Group. “Our first quarter results continue to reflect our global team’s delivery of excellent aviation safety performance in an environment that remains challenging in our oil and gas footprint. Our global team continues to execute our fiscal 2019 STRIVE priorities with a focus on being a leader in every market we serve and a return to profitability.”
BUSINESS AND FINANCIAL HIGHLIGHTS
•
Net loss was $32.1 million ($0.90 per diluted share) for the June 2018 quarter compared to a net loss of $55.3 million ($1.57 per diluted share) for the June 2017 quarter.
•
Adjusted net loss was $29.1 million ($0.82 per diluted share) for the June 2018 quarter compared to an adjusted net loss of $29.1 million ($0.83 per diluted share) for the June 2017 quarter.
•
Adjusted EBITDA for the June 2018 quarter of $26.8 million was up 76% over the June 2017 quarter, and up 17% over the March 2018 quarter, benefiting from $12.2 million of original equipment manufacturer (“OEM”) cost recoveries.
•
We are reaffirming our fiscal 2019 adjusted EBITDA guidance of $90 million - $140 million provided in May 2018.

1
        

•
After principal and interest payments in the June 2018 quarter of $38.8 million, we had $341.8 million of total liquidity as of June 30, 2018, including $25.2 million of undrawn borrowing capacity on our new ABL Facility.
“We continue to operate in a short-cycle offshore market characterized this fiscal year by an uneven recovery both quarter to quarter and geographically. We have seen a stronger than expected recovery in the U.S. Gulf of Mexico and Africa as utilization on existing assets has improved. These markets reflect our overall lower cost structure and more responsive, regionally focused businesses,” said Jonathan Baliff. “Bristow’s previous refinancings have enhanced our liquidity profile and we are well-positioned to take advantage of the beginning of an offshore investment cycle as seismic activity has increased and more exploration rigs are going to work.”
Operating revenue from external customers by line of service was as follows:
        
 
Three Months Ended 
 June 30,
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
(in thousands, except percentages)
Oil and gas services
$
227,771

 
$
234,775

 
(3.0
)%
U.K. SAR services
66,320

 
52,587

 
26.1
 %
Fixed wing services
56,707

 
50,677

 
11.9
 %
Corporate and other
189

 
1,690

 
(88.8
)%
Total operating revenue
$
350,987

 
$
339,729

 
3.3
 %
The year-over-year increase in operating revenue was primarily driven by increases in U.K. SAR and fixed wing services revenue in our Europe Caspian and Africa regions. The increase in U.K. SAR services revenue included the one-time benefit of $7.6 million in OEM cost recoveries recognized in the June 2018 quarter. Additionally, revenue increased by $10.5 million compared to the June 2017 quarter due to changes in foreign currency exchange rates, primarily related to the strengthening of the British pound sterling versus the U.S. dollar.
The year-over-year change in GAAP net loss and diluted loss per share were primarily driven by higher revenue in the June 2018 quarter as discussed above, lower rent expense, lower general and administrative expense and a more favorable effective tax rate. These favorable changes were partially offset by higher interest expense and higher loss on unconsolidated affiliates in the June 2018 quarter.
The GAAP net loss and diluted loss per share for the June 2018 quarter included organizational restructuring costs of $1.7 million ($1.7 million net of tax), or $0.05 per share, included in direct cost and general and administrative expense, which resulted from separation programs across our global organization designed to increase efficiency and reduce costs.
Additionally, we had a loss on disposal of assets of $1.7 million ($1.3 million net of tax), or $0.04 per share, during the June 2018 quarter from the sale or disposal of aircraft and other equipment.
The June 2018 quarter results benefited from the impact of $12.2 million of OEM cost recoveries realized in the June 2018 quarter that resulted in the one-time benefit of $7.6 million in U.K. SAR operating revenue discussed above, a $3.5 million reduction in rent expense and a $1.1 million reduction in direct costs. The OEM cost recoveries described above are included within adjusted net income, adjusted earnings per share and adjusted EBITDA in the June 2018 quarter.
Adjusted EBITDA, adjusted net loss and adjusted diluted loss per share benefited from the increase in revenue, decrease in rent and general and administrative expense and favorable impact of changes in foreign currency exchange rates compared to the June 2017 quarter. These items were mostly offset by increased interest expense, resulting in no significant change in adjusted net loss and adjusted diluted loss per share year-over-year. The increase in revenue and decrease in rent expense includes the OEM cost recoveries described above.
The June 2017 quarter was also impacted by special items as reflected in the table at the end of this release.

2
        

LIQUIDITY AND FINANCIAL FLEXIBILITY
Don Miller, Senior Vice President and Chief Financial Officer, commented, “On the heels of the success we had in fiscal 2018 in terms of improving our liquidity runway, we finished the June 2018 quarter with almost $350 million in liquidity including the completion of our ABL facility in April. We remain focused on revenue growth, cost reduction and improved returns, including the return of seven leased aircraft in the June quarter with the ability to return another 18 aircraft over the remainder of fiscal 2019.”
REGIONAL PERFORMANCE

Europe Caspian
 
 
Three Months Ended 
 June 30,
 
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
210,986

 
$
184,478

 
14.4
 %
Operating income
 
$
21,928

 
$
4,371

 
*

Operating margin
 
10.4
%
 
2.4
%
 
333.3
 %
Adjusted EBITDA
 
$
35,650

 
$
16,152

 
120.7
 %
Adjusted EBITDA margin
 
16.9
%
 
8.8
%
 
92.0
 %
Rent expense
 
$
31,996

 
$
36,453

 
(12.2
)%
_____________ 

 * percentage change too large to be meaningful or not applicable
The increase in operating revenue in the June 2018 quarter primarily resulted from an increase of $13.7 million in U.K. SAR revenue, including a one-time benefit of OEM cost recovery of $7.6 million, an increase in Norway primarily due to an increase in activity and short-term contracts and an increase in fixed wing revenue from Eastern Airways. Additionally, revenue in this region benefited from a favorable year-over-year impact of changes in foreign currency exchange rates of $10.8 million. Eastern Airways contributed $34.8 million and $27.9 million in operating revenue for the June 2018 quarter and June 2017 quarter, respectively.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin increased in the June 2018 quarter primarily due to the increase in operating revenue discussed above, the benefit to rent expense and direct costs in the June 2018 quarter related to OEM cost recoveries, the benefit of the return of leased aircraft and favorable year-over-year impacts from changes in foreign currency exchange rates. These benefits were partially offset by increased salaries and benefits and maintenance expense year-over-year due to the increase in activity. Eastern Airways contributed a negative $0.1 million and positive $0.1 million in adjusted EBITDA for the June 2018 quarter and June 2017 quarter, respectively.
Africa
 
 
Three Months Ended 
 June 30,
 
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
34,915

 
$
49,981

 
(30.1
)%
Operating income
 
$
1,141

 
$
10,048

 
(88.6
)%
Operating margin
 
3.3
%
 
20.1
%
 
(83.6
)%
Adjusted EBITDA
 
$
5,319

 
$
13,383

 
(60.3
)%
Adjusted EBITDA margin
 
15.2
%
 
26.8
%
 
(43.3
)%
Rent expense
 
$
2,122

 
$
2,200

 
(3.5
)%
Operating revenue for Africa decreased in the June 2018 quarter primarily due to a contract that expired on March 31, 2018, which was partially offset by an increase in activity from other oil and gas customers as we have seen a stronger than expected recovery as utilization on existing assets has improved. Additionally, fixed wing services in Africa generated $2.2 million and $1.8 million of operating revenue for the June 2018 quarter and June 2017 quarter, respectively.

3
        

Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin decreased as a result of the decrease in operating revenue in the June 2018 quarter, which was only partially offset by a decrease in direct costs and general and administrative expense. Additionally, during the June 2018 quarter we incurred $1.5 million of demobilization costs related to the contract that expired on March 31, 2018.
Americas
 
 
Three Months Ended 
 June 30,
 
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
53,810

 
$
57,783

 
(6.9
)%
Earnings from unconsolidated affiliates
 
$
(2,907
)
 
$
(535
)
 
*

Operating income
 
$
(7,587
)
 
$
(1,256
)
 
*

Operating margin
 
(14.1
)%
 
(2.2
)%
 
*

Adjusted EBITDA
 
$
(407
)
 
$
6,176

 
*

Adjusted EBITDA margin
 
(0.8
)%
 
10.7
 %
 
*

Rent expense
 
$
6,598

 
$
6,994

 
(5.7
)%
_____________ 
 * percentage change too large to be meaningful or not applicable
Operating revenue decreased in the June 2018 quarter primarily due to a decrease in operating revenue in Canada and Trinidad due to lower activity, partially offset by an increase in activity with our U.S. Gulf of Mexico oil and gas customers as we have seen a stronger than expected recovery as utilization on existing assets has improved.
Earnings from unconsolidated affiliates, net of losses, decreased to a loss of $2.9 million primarily due to a decrease in earnings from our investment in Líder in Brazil due to an unfavorable change in exchange rates and decline in activity.
The decreases in operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin were driven by the decreases in operating revenue and earnings from unconsolidated affiliates discussed above, partially offset by a decrease in rent expense.
Asia Pacific
 
 
Three Months Ended 
 June 30,
 
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
54,404

 
$
49,127

 
10.7
 %
Operating loss
 
$
(971
)
 
$
(12,530
)
 
92.3
 %
Operating margin
 
(1.8
)%
 
(25.5
)%
 
92.9
 %
Adjusted EBITDA
 
$
2,086

 
$
(5,720
)
 
*

Adjusted EBITDA margin
 
3.8
 %
 
(11.6
)%
 
*

Rent expense
 
$
8,117

 
$
10,954

 
(25.9
)%
_____________ 
 * percentage change too large to be meaningful or not applicable
Operating revenue increased in the June 2018 quarter primarily due to an increase in operating revenue in Australia due to new contracts and increased activity with oil and gas customers, partially offset by a decrease from our fixed wing operations as Airnorth contributed $19.7 million and $21.0 million in operating revenue for the June 2018 quarter and June 2017 quarter, respectively.

4
        

Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin improved in the June 2018 quarter primarily due to an increase in operating revenue discussed above, a decrease in salaries and benefits due to headcount reductions and a reduction to rent expense related to OEM cost recoveries and lease returns. Adjusted EBITDA and adjusted EBITDA margin were negatively impacted by a $2.6 million unfavorable impact of foreign currency exchange rate changes. Airnorth contributed $0.2 million and $0.9 million in adjusted EBITDA for the June 2018 quarter and June 2017 quarter, respectively.
Corporate and other
 
 
Three Months Ended 
 June 30,
 
 
 
 
2018
 
2017
 
% Change
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
190

 
$
1,712

 
(88.9
)%
Operating loss
 
$
(16,631
)
 
$
(25,950
)
 
35.9
 %
Adjusted EBITDA
 
$
(15,879
)
 
$
(14,788
)
 
(7.4
)%
Rent expense
 
$
1,248

 
$
2,074

 
(39.8
)%
Operating revenue decreased in the June 2018 quarter primarily due to the sale of Bristow Academy on November 1, 2017.
Operating loss decreased in the June 2018 quarter primarily due to the inclusion of $8.3 million related to organizational restructuring costs in the June 2017 quarter and $1.2 million of inventory impairment charges in the June 2017 quarter, both of which are excluded from adjusted EBITDA. Adjusted EBITDA decreased primarily due to an increase of $1.1 million in foreign currency transaction losses year-over-year.
GUIDANCE
Guidance for selected financial measures is included in the tables that follow.
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, August 3, 2018 to review financial results for the fiscal year 2019 first quarter ended June 30, 2018. 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 2019 First 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
Via Telephone outside the U.S.:
•
Live: Dial 1-412-902-0030
ABOUT BRISTOW GROUP INC.
Bristow Group Inc. is the leading global industrial aviation services provider offering helicopter transportation, search and rescue (SAR) and aircraft support services, including maintenance, to government and civil organizations worldwide. Bristow 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. Bristow provides SAR services to the private sector worldwide and to the public sector for all of the U.K. on behalf of the Maritime and Coastguard Agency. For more information, visit bristowgroup.com.

5
        

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 executing 2019 STRIVE priorities, earnings guidance, expected contract revenue, capital deployment strategy, operational and capital performance, expected cost management activities, expected capital expenditure deferrals, shareholder return, liquidity and 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 customers and suppliers; the risk of reductions in spending on industrial aviation 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 program; availability of employees; and political instability, war or acts of terrorism in any of the countries where 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, 2018. 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)

Investor Relations
Linda McNeill
Director, Investor Relations
+1 713.267.7622

Global Media Relations
Adam Morgan
Director, Global Communications
+1 281.253.9005


6
        

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and percentages)
(Unaudited)
 
Three Months Ended 
 June 30,
 
2018
 
2017
 
 
 
 
 
 
Revenue:
 
 
 
Operating revenue from non-affiliates
$
338,466

 
$
322,118

Operating revenue from affiliates
12,521

 
17,611

Reimbursable revenue from non-affiliates
16,907

 
12,380

 
367,894

 
352,109

Operating expense:
 
 
 
Direct cost
280,051

 
285,580

Reimbursable expense
15,904

 
12,226

Depreciation and amortization
30,941

 
31,056

General and administrative
40,101

 
46,707

 
366,997

 
375,569

 
 
 
 
Loss on impairment
—

 
(1,192
)
Loss on disposal of assets
(1,678
)
 
699

Earnings from unconsolidated affiliates, net of losses
(3,017
)
 
(665
)
Operating loss
(3,798
)
 
(24,618
)
 
 
 
 
Interest expense, net
(27,144
)
 
(16,021
)
Other income (expense), net
(3,950
)
 
(1,616
)
Loss before provision for income taxes
(34,892
)
 
(42,255
)
Benefit (provision) for income taxes
2,851

 
(13,491
)
Net loss
(32,041
)
 
(55,746
)
Net loss attributable to noncontrolling interests
(67
)
 
471

Net loss attributable to Bristow Group
$
(32,108
)
 
$
(55,275
)
 
 
 
 
Loss per common share:
 
 
 
Basic
$
(0.90
)
 
$
(1.57
)
Diluted
$
(0.90
)
 
$
(1.57
)
 
 
 
 
Non-GAAP measures:
 
 
 
Adjusted EBITDA
$
26,769

 
$
15,203

Adjusted EBITDA margin
7.6
%
 
4.5
%
Adjusted net loss
$
(29,123
)
 
$
(29,138
)
Adjusted diluted loss per share
$
(0.82
)
 
$
(0.83
)

7
        

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
June 30, 
 2018
 
March 31,  
 2018
ASSETS
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
316,550

 
$
380,223

Accounts receivable from non-affiliates
 
246,886

 
233,386

Accounts receivable from affiliates
 
12,914

 
13,594

Inventories
 
125,681

 
129,614

Assets held for sale
 
23,502

 
30,348

Prepaid expenses and other current assets
 
49,584

 
47,234

Total current assets
 
775,117

 
834,399

Investment in unconsolidated affiliates
 
114,609

 
126,170

Property and equipment – at cost:
 
 
 
 
Land and buildings
 
242,068

 
250,040

Aircraft and equipment
 
2,493,370

 
2,511,131

 
 
2,735,438

 
2,761,171

Less – Accumulated depreciation and amortization
 
(715,496
)
 
(693,151
)
 
 
2,019,942

 
2,068,020

Goodwill
 
19,175

 
19,907

Other assets
 
118,955

 
116,506

Total assets
 
$
3,047,798

 
$
3,165,002

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
 
 
 
 
Accounts payable
 
$
100,299

 
$
101,270

Accrued wages, benefits and related taxes
 
49,030

 
62,385

Income taxes payable
 
6,142

 
8,453

Other accrued taxes
 
8,573

 
7,378

Deferred revenue
 
18,729

 
15,833

Accrued maintenance and repairs
 
30,440

 
28,555

Accrued interest
 
16,388

 
16,345

Other accrued liabilities
 
51,325

 
65,978

Short-term borrowings and current maturities of long-term debt
 
53,723

 
56,700

Total current liabilities
 
334,649

 
362,897

Long-term debt, less current maturities
 
1,410,083

 
1,429,834

Accrued pension liabilities
 
30,526

 
37,034

Other liabilities and deferred credits
 
32,302

 
36,952

Deferred taxes
 
114,645

 
115,192

 
 
 
 
 
Stockholders’ investment:
 
 
 
 
Common stock
 
385

 
382

Additional paid-in capital
 
856,826

 
852,565

Retained earnings
 
759,929

 
793,783

Accumulated other comprehensive loss
 
(313,918
)
 
(286,094
)
Treasury shares
 
(184,796
)
 
(184,796
)
Total Bristow Group stockholders’ investment
 
1,118,426

 
1,175,840

Noncontrolling interests
 
7,167

 
7,253

Total stockholders’ investment
 
1,125,593

 
1,183,093

Total liabilities and stockholders’ investment
 
$
3,047,798

 
$
3,165,002


8
        

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


 
 
Three Months Ended 
 June 30,
 
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(32,041
)
 
$
(55,746
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
30,941

 
31,056

Deferred income taxes
 
(6,776
)
 
6,651

Discount amortization on long-term debt
 
1,510

 
23

Loss (gain) on disposal of assets
 
1,678

 
(699
)
Loss on impairment
 
—

 
1,192

Deferral of lease payment
 
1,568

 
—

Stock-based compensation
 
1,692

 
4,136

Equity in earnings from unconsolidated affiliates less than dividends received
 
3,201

 
665

Increase (decrease) in cash resulting from changes in:
 
 
 
 
Accounts receivable
 
(19,833
)
 
(21,541
)
Inventories
 
(1,496
)
 
(3,551
)
Prepaid expenses and other assets
 
(1,729
)
 
5,106

Accounts payable
 
3,385

 
(3,288
)
Accrued liabilities
 
(21,845
)
 
(8,807
)
Other liabilities and deferred credits
 
(4,374
)
 
(6,376
)
Net cash used in operating activities
 
(44,119
)
 
(51,179
)
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(8,895
)
 
(12,553
)
Proceeds from asset dispositions
 
7,774

 
41,975

Net cash provided by (used in) investing activities
 
(1,121
)
 
29,422

Cash flows from financing activities:
 
 
 
 
Proceeds from borrowings
 
387

 
69,018

Debt issuance costs
 
(2,378
)
 
(493
)
Repayment of debt
 
(14,194
)
 
(66,947
)
Partial prepayment of put/call obligation
 
(14
)
 
(12
)
Common stock dividends paid
 
—

 
(2,465
)
Issuance of common stock
 
2,830

 
—

Repurchases for tax withholdings on vesting of equity awards
 
(1,484
)
 
(274
)
Net cash used in financing activities
 
(14,853
)
 
(1,173
)
Effect of exchange rate changes on cash and cash equivalents
 
(3,580
)
 
5,153

Net decrease in cash and cash equivalents
 
(63,673
)
 
(17,777
)
Cash and cash equivalents at beginning of period
 
380,223

 
96,656

Cash and cash equivalents at end of period
 
$
316,550

 
$
78,879








9
        

BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
 
 
Three Months Ended 
 June 30,
 
 
2018
 
2017
Flight hours (excluding Bristow Academy and unconsolidated affiliates):
 
 
 
 
Europe Caspian
 
23,368

 
22,147

Africa
 
3,670

 
7,523

Americas
 
9,267

 
7,692

Asia Pacific
 
6,898

 
6,361

Consolidated
 
43,203

 
43,723

Operating revenue:
 
 
 
 
Europe Caspian
 
$
210,986

 
$
184,478

Africa
 
34,915

 
49,981

Americas
 
53,810

 
57,783

Asia Pacific
 
54,404

 
49,127

Corporate and other
 
190

 
1,712

Intra-region eliminations
 
(3,318
)
 
(3,352
)
Consolidated
 
$
350,987

 
$
339,729

Consolidated operating loss:
 
 
 
 
Europe Caspian
 
$
21,928

 
$
4,371

Africa
 
1,141

 
10,048

Americas
 
(7,587
)
 
(1,256
)
Asia Pacific
 
(971
)
 
(12,530
)
Corporate and other
 
(16,631
)
 
(25,950
)
Loss on disposal of assets
 
(1,678
)
 
699

Consolidated
 
$
(3,798
)
 
$
(24,618
)
Operating margin:
 
 
 
 
Europe Caspian
 
10.4
 %
 
2.4
 %
Africa
 
3.3
 %
 
20.1
 %
Americas
 
(14.1
)%
 
(2.2
)%
Asia Pacific
 
(1.8
)%
 
(25.5
)%
Consolidated
 
(1.1
)%
 
(7.2
)%
Adjusted EBITDA:
 
 
 
 
Europe Caspian
 
$
35,650

 
$
16,152

Africa
 
5,319

 
13,383

Americas
 
(407
)
 
6,176

Asia Pacific
 
2,086

 
(5,720
)
Corporate and other
 
(15,879
)
 
(14,788
)
Consolidated
 
$
26,769

 
$
15,203

Adjusted EBITDA margin:
 
 
 
 
Europe Caspian
 
16.9
 %
 
8.8
 %
Africa
 
15.2
 %
 
26.8
 %
Americas
 
(0.8
)%
 
10.7
 %
Asia Pacific
 
3.8
 %
 
(11.6
)%
Consolidated
 
7.6
 %
 
4.5
 %

10
        

 
 
Three Months Ended 
 June 30,
 
 
2018
 
2017
Depreciation and amortization:
 
 
 
 
Europe Caspian
 
$
12,755

 
$
11,822

Africa
 
3,414

 
3,076

Americas
 
6,881

 
6,999

Asia Pacific
 
4,355

 
5,810

Corporate and other
 
3,536

 
3,349

Consolidated
 
$
30,941

 
$
31,056

Rent expense:
 
 
 
 
Europe Caspian
 
$
31,996

 
$
36,453

Africa
 
2,122

 
2,200

Americas
 
6,598

 
6,994

Asia Pacific
 
8,117

 
10,954

Corporate and other
 
1,248

 
2,074

Consolidated
 
$
50,081

 
$
58,675



11
        

BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
As of June 30, 2018
(Unaudited)
 
 
Percentage
of Current
Quarter
Operating
Revenue
 
Aircraft in Consolidated Fleet
 
 
 
 
 
 
Helicopters
 
Fixed
Wing (1)
 
 
 
Unconsolidated
Affiliates (4)
 
 
 
 
Small
 
Medium
 
Large
Total (2)(3)
 
Total
Europe Caspian
 
60
%
 
—

 
14

 
79

 
34

 
127

 
—

 
127

Africa
 
10
%
 
6

 
28

 
4

 
3

 
41

 
48

 
89

Americas
 
15
%
 
18

 
40

 
15

 
—

 
73

 
61

 
134

Asia Pacific
 
15
%
 
—

 
10

 
21

 
14

 
45

 
—

 
45

Total
 
100
%
 
24

 
92

 
119

 
51

 
286

 
109

 
395

Aircraft not currently in fleet: (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On order
 
 
 
—

 
—

 
27

 
—

 
27

 
 
 
 
Under option
 
 
 
—

 
—

 
4

 
—

 
4

 
 
 
 
_____________ 
(1) 
Eastern Airways operates a total of 34 fixed wing aircraft in the Europe Caspian region and provides technical support for two fixed wing aircraft in the Africa region. Additionally, Airnorth operates a total of 14 fixed wing aircraft, which are included in the Asia Pacific region.
(2) 
Includes 10 aircraft held for sale and 99 leased aircraft as follows:
 
 
Held for Sale Aircraft in Consolidated Fleet
 
 
Helicopters
 
 
 
 
Small
 
Medium
 
Large
 
Fixed
Wing
 
Total
Europe Caspian
 
—

 
1

 
—

 
—

 
1

Africa
 
2

 
3

 
—

 
—

 
5

Americas
 
—

 
3

 
—

 
—

 
3

Asia Pacific
 
—

 
—

 
—

 
1

 
1

Total
 
2

 
7

 
—

 
1

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
Leased Aircraft in Consolidated Fleet
 
 
Helicopters
 
 
 
 
 
 
Small
 
Medium
 
Large
 
Fixed
Wing
 
Total
Europe Caspian
 
—

 
5

 
38

 
15

 
58

Africa
 
—

 
1

 
2

 
2

 
5

Americas
 
2

 
14

 
6

 
—

 
22

Asia Pacific
 
—

 
3

 
7

 
4

 
14

Total
 
2

 
23

 
53

 
21

 
99

(3) 
The average age of our fleet was approximately ten years as of June 30, 2018.
(4) 
The 109 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 41 helicopters (primarily medium) and 19 fixed wing aircraft owned and managed by Líder Táxi Aéreo S.A. (“Líder”), our unconsolidated affiliate in Brazil included in the Americas region, and 41 helicopters and seven fixed wing aircraft owned by Petroleum Air Services (“PAS”), our unconsolidated affiliate in Egypt included in the Africa region, and one helicopter operated by Cougar Helicopters Inc., our unconsolidated affiliate in Canada.
(5) 
This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.



12
        


BRISTOW GROUP INC. AND SUBSIDIARIES
FY 2019 GUIDANCE

FY 2019 guidance as of June 30, 2018(1)
 
Operating revenue 2
Adjusted EBITDA2,3
Rent2
Oil and gas
~$825M - $925M
~$20M - $50M
~$115M - $125M
U.K. SAR
~$230M - $240M
~$70M - $80M
~$45M - $50M
Eastern
~$90M - $100M
~$0M - $5M 4
~$10M - $12M
Airnorth
~$80M - $90M
~$0M - $5M 4
~$8M - $10M
Total
~$1.25B - $1.35B
~$90M - $140M
~$185M - $195M
 
 
 
 
G&A expense
~$150M - $170M
 
 
Depreciation expense
~$115M - $125M
 
 
Total aircraft rent 5
~$160M - $165M
 
 
Total non-aircraft rent 5
~$25M - $30M
 
 
Interest expense
~$100M - $110M
 
 
Non-aircraft capex 4
~$30M annually
 
 
Aircraft Sale Proceeds 4
~$20M annually
 
 
_____________ 
(1) 
FY19 guidance assumes FX rates as of June 30, 2018.
(2) 
Operating revenue, adjusted EBITDA and rent for oil and gas includes corporate and other revenue and the impact of corporate overhead expenses.
(3) 
Adjusted EBITDA for U.K. SAR and fixed wing (Eastern/Airnorth) excludes corporate overhead allocations consistent with financial reporting. Adjusted EBITDA is a non-GAAP measure of which the most comparable GAAP measure is net income (loss). We have not provided a reconciliation of this non-GAAP forward-looking information to GAAP. The most comparable GAAP measure to adjusted EBITDA is net income (loss) which is not calculated at this lower level of our business as we do not allocate certain costs, including corporate and other overhead costs, interest expense and income taxes within our accounting system. Providing this data would require unreasonable efforts in the form of allocations of other costs across the organization.
(4) 
Updated from guidance provided in May 2018.
(5) 
Total aircraft rent and total non-aircraft rent are inclusive of the respective components of rent expense for U.K. SAR, Eastern, Airnorth plus oil and gas.


13
        

BRISTOW GROUP INC. AND SUBSIDIARIES
GAAP RECONCILIATIONS

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 
 June 30,
 
 
2018
 
2017
 
 
 
 
 
 
 
(In thousands, except percentages and per share amounts)
Net loss
 
$
(32,041
)
 
$
(55,746
)
Loss (gain) on disposal of assets
 
1,678

 
(699
)
Special items
 
1,719

 
10,866

Depreciation and amortization
 
30,941

 
31,056

Interest expense
 
27,323

 
16,235

Provision (benefit) for income taxes
 
(2,851
)
 
13,491

Adjusted EBITDA
 
$
26,769

 
$
15,203

 
 
 
 
 
Benefit (provision) for income taxes
 
$
2,851

 
$
(13,491
)
Tax provision (benefit) on loss on disposal
  of assets
 
(404
)
 
4,573

Tax provision (benefit) on special items
 
(8
)
 
11,397

Adjusted benefit for income taxes
 
$
2,439

 
$
2,479

 
 
 
 
 
Effective tax rate (1)
 
8.2
%
 
(31.9
)%
Adjusted effective tax rate (1)
 
7.7
%
 
7.7
 %
 
 
 
 
 
Net loss attributable to Bristow Group
 
$
(32,108
)
 
$
(55,275
)
Loss on disposal of assets
 
1,274

 
3,874

Special items
 
1,711

 
22,263

Adjusted net loss
 
$
(29,123
)
 
$
(29,138
)


 
 
 
 
Diluted loss per share
 
$
(0.90
)
 
$
(1.57
)
Loss on disposal of assets
 
0.04

 
0.11

Special items
 
0.05

 
0.63

Adjusted diluted loss per share
 
(0.82
)
 
(0.83
)
_____________ 
(1) 
Effective tax rate is calculated by dividing benefit (provision) for income tax by pretax net loss. Adjusted effective tax rate is calculated by dividing adjusted benefit (provision) for income tax by adjusted pretax net loss. Tax provision (benefit) on loss on disposal of assets and tax provision (benefit) on special items is calculated using the statutory rate of the entity recording the loss on disposal of assets or special item.  

14
        

 
 
Three Months Ended 
 June 30, 2018
 
 
Adjusted
EBITDA
 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
Per
Share
 
 
 
 
 
 
 
 
 
(In thousands, except per share amounts)
Organizational restructuring costs (1)
 
$
(1,719
)
 
$
(1,711
)
 
$
(0.05
)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30, 2017
 
Adjusted
EBITDA
 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
Per
Share
 
 
 
 
 
 
 
 
 
(In thousands, except per share amounts)
Organizational restructuring costs (1)
 
$
(9,674
)
 
$
(6,602
)
 
$
(0.19
)
Inventory impairment
 
(1,192
)
 
(775
)
 
(0.02
)
Tax valuation allowances (2)
 
—

 
(14,886
)
 
(0.42
)
Total special items
 
$
(10,866
)
 
$
(22,263
)
 
(0.63
)
 
 
 
 
 
 
 
_____________ 
(1) 
Organizational restructuring costs include severance expense related to separation programs across our global organization designed to increase efficiency and cut costs as well other restructuring costs.
(2) 
Relates to non-cash adjustments related to the valuation of deferred tax assets.

15

Bristow Group Inc Reports