Bristow Group, Inc. · NYSE:VTOL
Bristow — Q2 FY14 Earnings Presentation
42 slides from Bristow's earnings presentation, Nov 12, 2013
Slide 1: Second Quarter FY14 Earnings Presentation
Exhibit 99.1 Second Quarter FY14 Earnings Presentation Bristow Group Inc. November 8, 2013
Slide 2: Second quarter earnings call agenda
Second quarter earnings call agenda Introduction Linda McNeill, Director Investor Relations CEO remarks and operational highlights Bill Chiles, President and CEO Current and future financial performance Jonathan Baliff, SVP and CFO Closing remarks Bill Chiles, President and CEO Questions and answers
Slide 3: Forward-looking statements
Forward-looking statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements include statements about our future business, operations, capital expenditures, fleet composition, capabilities
Slide 4: Chief Executive Officer comments
Chief Executive Officer comments Bill Chiles, President and CEO 4
Slide 5: Operational safety review
Operational safety review Commercial Air Accident Rate* per 100,000 Lost Work Case Rate* per 200,000 flight hours (fiscal year) man hours (cumulative) 1.5 1.26 1 0.59 0.59 0.58 3 0.40 0.44 0.5 0.23 0.21 0.19 0.17 0.16 0.09 0 O N D J F M A M J J A S 2 FY13 FY14 0.96 1 Total Recordable Injury Rate* pe
Slide 6: Q2 FY14 highlights
Q2 FY14 highlights • Q2 operating revenue of $378.6M (16.2% increase from Q2 FY13, 5.3% increase from Q1 FY14) • Q2 GAAP EPS of $3.01 (267.1% increase from Q2 FY13, 306.8% increase from Q1 FY14) • Q2 adjusted EPS* of $1.27 (58.8% increase from Q2 FY13, 27% increase from Q1 FY14) • Q2 adjusted EBITDA
Slide 7: Super Puma fleet update
Super Puma fleet update • Regulatory approved interim solutions are being implemented, which include aircraft modifications and new maintenance/operating procedures. The new redesigned gear shaft is expected to be available at the earliest in mid-CY14. • Five of our EC225s returned to full revenue s
Slide 8: Europe (EBU)
Europe (EBU) • Europe contributed 43% of Bristow operating revenue and 47% of adjusted EBITDAR* in Q2 FY14 • Operating revenue increased to $156.4M in Q2 FY14 from $125.0M in Q2 FY13 with the addition of eight new large a/c over the comparable quarter and new contracts in the Northern North Sea • Ad
Slide 9: SAR update
SAR update • Since the start of the Gap SAR contract, we have conducted over 120 missions and rescued and/or assisted over 110 persons • Sumburgh and Stornoway bases generated $11.9M of revenue in Q2 FY14 • Construction of first two UK SAR bases has commenced Outlook: • Finalizing lease documents fo
Slide 10: West Africa (WASBU)
West Africa (WASBU) • Nigeria contributed 21% of Bristow operating revenue and 20% of adjusted EBITDAR* in Q2 FY14 • Operating revenue increased by 16.2% to $75.9M in Q2 FY14 from $65.3M in Q2 FY13 due to increased pricing, ad hoc flying and new contracts • Adjusted EBITDAR increased to $23.1M in Q2
Slide 11: North America (NABU)
North America (NABU) • North America contributed 17% of Bristow operating revenue and 16% of adjusted EBITDAR* in Q2 FY14 • Operating revenue increased 5.9% to $60.4M in Q2 FY14 from $57.0M in Q2 FY13 primarily as a result of the addition of eight aircraft dry leased to Cougar in Canada offset by a
Slide 12: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 10% of Bristow operating revenue and 6% of adjusted EBITDAR* in Q2 FY14 • Operating revenue decreased to $35.3M in Q2 FY14 from $38.4M in Q2 FY13 due to the ending of short term contracts and the negative impact of foreign currency exchange rate changes • Ad
Slide 13: Other International (OIBU)
Other International (OIBU) • Other International contributed 9% of Bristow operating revenue and 11% of adjusted EBITDAR* in Q2 FY14 • Operating revenue slightly increased to $32.2M in Q2 FY14 vs. $32.1M in Q2 FY13 due to increased activity in Trinidad and Brazil offset by a decline in aircraft on c
Slide 14: Financial discussion
Financial discussion Jonathan Baliff, SVP and CFO 14
Slide 15: Financial highlights Q2
Financial highlights Q2: Adjusted EPS and EBITDAR summary Q2 FY13 to Q2 FY14 adjusted EPS bridge $0.06 $0.08 $0.61 $1.27 $0.80 Q2 FY13 Operations Corporate and Other FX Changes Q2 FY14 Q2 FY13 to Q2 FY14 adjusted EBITDAR bridge (in millions) $3.3 $3.3 $23.6 $108.5 $84.9 Q2 FY13 Operations Corporate
Slide 16: Financial highlights YTD
Financial highlights YTD: Adjusted EPS and EBITDAR summary YTD FY13 to YTD FY14 adjusted EPS bridge $0.09 $0.03 $0.62 $2.28 $1.60 YTD FY13 Operations Corporate and Other FX Changes YTD FY14 YTD FY13 to YTD FY14 adjusted EBITDAR bridge (in millions) $6.4 $1.3 $38.0 $211.8 $168.7 YTD FY13 Operations C
Slide 17: LACE and LACE rate continue to increase
LACE and LACE rate continue to increase led by new technology a/c and improved utilization/terms 350 ($ in millions) LACE* LACE Rate* Consolidatedcommercialaircraft Large Aircraft Equivalent (LACE)*170 9.07 10 8.35 300 290 7.89 279 268 271 271 8 7.15 250 6.494 160 6 200 159 153 158 160 149 150 4 150
Slide 18: Revenue growth and capital efficiency drive quarterly BVA improvement
Combination of revenue growth and capital efficiency drives quarterly BVA improvement Absolute BVA* Q2 FY12 – Q2 FY14 25 20.6 20 15 13.6 10 9.3 9.4 5 1.5 1.1 1.9 2.1 0.0 0 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 -5 • Q2 FY14 BVA is positive $20.6M, record improvement
Slide 19: Our progress on BVA yields stronger liquidity for growth
Our progress on BVA yields stronger liquidity for growth . . . Net cash provided by operating activities* Total liquidity 300 700 267 618 600 250 231 500 200 195 314 402 415 400 151 150 300 216 261 262 100 200 178 116 135 132 305 117 78 50 94 100 199 69 144 140 100 0 - FY10 FY11 FY12 FY13 YTD FY14 F
Slide 20: FY14 guidance increased
… with FY14 guidance increased • FY14 adjusted EPS guidance increased to $4.25 - $4.55, excluding special items and a/c sales. Other specific items include: LACE (Large AirCraft Equivalent) ~160 - 164 Interest expense ~ $30 - $35M LACE Rate ~ $8.95 - $9.25M Rent expense (a/c only) ~$85 - $90M G & A
Slide 21: Conclusions
Conclusions • Safety continues to be our #1 core value as we strive to achieve Target Zero • Bristow is positioned in the major markets that have high growth for helicopter services required for offshore drilling, production and SAR • Clients are turning to Bristow as their provider of choice due to
Slide 22: Appendix
Appendix BEC ERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 23: Organizational chart - as of September 30, 2013
Organizational chart - as of September 30, 2013 Bristow NABU EBU WASBU AUSBU OIBU BRS Academy 16 % 40 % 21 % 10 % 9% 4 %* U.S. GoM – 73/6 UK – 45/5 Nigeria – 44/6 Australia – 24/10 Mexico – 6/6 Florida – 57/1 Alaska – 12/3 Norway – 17/4 Brazil – 11/9 Louisiana – 13/1 Canada – 8/2 Netherlands – 2/1 N
Slide 24: Aircraft Fleet – Medium and Large
Aircraft Fleet – Medium and Large as of September 30, 2013 Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large capacity 16-25 passengers Large Helicopters AS332 L Super Puma 18 Twin Turbine 20 - 20 - AW189 16 Twin Turbine - - - 17 EC175 16 Twin Turbine - - - 5 EC225 25 Twin Turbine 20
Slide 25: Aircraft Fleet – Small, Training and Fixed
Aircraft Fleet – Small, Training and Fixed as of September 30, 2013 (continued) Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small capacity 4-7 passengers Small Helicopters AS350BB 4 Turbine - 2 2 - Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 28 6 34 - Bell 407 6 Turbine 3
Slide 26: Operating lease strategy: lowering the cost and amount of capital needed to grow
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of September 30, 2013 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 1 20 21 21 59 35% WASBU - 1 - 1 1 21 2% NABU 1 13 3 17 10 33 29% AUSBU 2 2 3 7 5 19 24% OIBU - - - - - 28 - Total 3
Slide 27: Consolidated fleet changes and aircraft sales for Q2 FY14
Consolidated fleet changes and aircraft sales for Q2 FY14 Fleet changes Held for sale aircraft in consolidated fleet Small Medium Large Training Total Q1 FY14 Q2 FY14 YTD Fleet Count Beginning 351 353 351 EBU - - - - - Delivered - WASBU - 1 - - 1 Large 3 2 5 NABU 19 - - - 19 Medium 2 3 5 AUSBU - - -
Slide 28: Operating revenue, LACE and LACE Rate by BU
Operating revenue, LACE and LACE Rate by BU Operating Revenue, LACE and LACE Rate by BU as of September 30, 2013 Op revenue1 LACE LACE Rate2,3 EBU $294 59 $9.95 WASBU 152 21 14.62 NABU 119 33 7.13 AUSBU 74 19 7.74 OIBU 65 28 4.73 4 Total $724 160 $9.07 1) $ in millions 2) LACE Rate is annualized 3)
Slide 29: Historical LACE by BU
Historical LACE by BU LACE FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU 45 45 45 42 42 43 48 46 44 46 46 45 WASBU 23 23 24 25 24 24 21 22 23 22 22 22 NABU 39 36 36 36 39 35 34 29 30 29 30 30 AUSBU 20 20 22 22 20 23 24 20 19 20 20 19 OIBU 36 34 34 35 33 33 33 38 39 38 38 34 Consolidated 163
Slide 30: Historical LACE Rate by BU
Historical LACE Rate by BU 1,2 LACE Rate FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU $8.36 $8.28 $8.40 $8.76 $8.20 $8.50 $7.90 $8.40 $9.80 $9.60 $9.63 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5
Slide 31: Order and options book as of September 30, 2013
Order and options book as of September 30, 2013 ORDER BOOK* OPTIONS BOOK Helicopter Helicopter # Class Delivery Date Location Contracted # Class Delivery Date 1 Medium December 2013 OIBU 1 of 1 3 Medium December 2014 3 Medium December 2013 NABU 4 Large March 2015 3 Large December 2013 EBU 2 of 3 2 M
Slide 32: Order and options book (continued)
Order and options book as of September 30, 2013 (continued) SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 1 Large June 2014 EBU 1 of 1 3 Large September 2014 EBU 3 of 3 2 Large December 2014 EBU 2 of 2 4 Large March 2015 EBU 4 of 4 2 Large June 2015 EBU 2 of 2 4 Larg
Slide 33: Adjusted EBITDAR margin trend
Adjusted EBITDAR margin* trend 2011 2012 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year EBU 29.8% 31.5% 34.6% 34.4% 32.7% 33.0% 31.4% 30.7% 36.1% 32.9% WASBU 33.7% 36.9% 35.8% 34.3% 35.2% 29.5% 35.5% 37.2% 36.6% 35.0% NABU 20.8% 25.8% 15.9% 8.5% 18.5% 14.3% 20.6% 14.8% 19.4% 17.3% AUSBU 33.2% 26.1% 27.
Slide 34: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2011 3/31/2012 ($ in millions) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Net income $20.9 $38.8 $42.3 $31.2 $133.3 $21.2 $3.0 $26.5 $14.6 $65.2 Income tax expense 8.5 3.3 -11.8 7.1 7.1 6.6 -1.9 7.1 2.4 14.2 Interest expense 11.1 11.5 13.8 9.
Slide 35: Bristow stock price reflects improved operational performance and increasing shareholder returns
Bristow stock price reflects improved operational performance and increasing shareholder returns 75.00 $70.39 70.00 65.00 $62.68 60.00 55.00 50.00 45.00 $47.67 40.00 35.00 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Book value of equity per share Net asset FMV per sh
Slide 36: Net asset fair market value (FMV) per share calculation
Net asset fair market value (FMV) per share calculation as of September 30, 2013 (in millions) (+) FMV of a/c $ 1,896 (+) FMV of leased a/c 753 (+) NBV of PPE w/o a/c 446 (+) Working capital 521 (-) LT debt (824) (-) Leased imputed debt (349) (-) Pension liability (127) Net asset FMV $ 2,316 # of co
Slide 37: Bristow Value Added (BVA) Sample calculation
Bristow Value Added (BVA) Sample calculation for Q2 FY14 and Q2 FY13 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q2 FY14 $20.6 = $109.2* - ( $3,376* X 2.625%**) Bristow Value Added calculation for
Slide 38: Gross cash flow reconciliation
Gross cash flow reconciliation (in millions) Gross Cash Flow Reconciliation Q2 FY13 Q2 FY14 Net Income 29.7 110.6 Depreciation and Amortization 23.3 23.9 Interest Expense 8.6 9.1 Interest Income (0.3) (0.8) Rent 15.3 23.3 Other Income/expense-net 0.2 (1.5) Gain/loss on Asset Sale 1.3 3.1 Gain on sal
Slide 39: Adjusted gross operating assets reconciliation
Adjusted gross operating assets reconciliation (in millions) Adjusted Gross Operating Assets Reconciliation Q2 FY13 Q2 FY14 Total Assets 2,785 3,166 Accumulated Depreciation 464 518 Capitalized Operating Leases 225 373 Cash and Cash Equivalents (348) (314) Investment in Unconsolidated Entities (215)
Slide 40: GAAP reconciliation
GAAP reconciliation Three Months Ended Six Months Ended September 30, September 30, 2013 2012 2013 2012 (In thousands, except per share amounts) Adjusted operating income $ 59,087 $ 46,274 $ 117,752 $ 93,276 Loss on disposal of assets (3,064) (1,262) (4,785) (6,577) (i) Special items (2,088) 2,316 (
Slide 41: Leverage reconciliation
Leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of September 30, 2013 $ 831.1 $ 1,760.5 $ 2,591.6 32.1% Adjust for: Unfunded Pension Liability 127.3 127.3 NPV of Lease Obligations 348.9 348.9 Letters of credit 2.4 2.4 Adjusted $ 1,309.6 (d)
Slide 42: Contact Us
Contact Us Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com 42