Bristow Group, Inc. · NYSE:VTOL
Bristow — Q1 FY15 Earnings Presentation
46 slides from Bristow's earnings presentation, Aug 5, 2014
Slide 1: First quarter FY15 earnings presentation
Exhibit 99.1 First quarter FY15 earnings presentation Bristow Group Inc. August 5, 2014
Slide 2: First quarter FY15 earnings call agenda
First quarter FY15 earnings call agenda Introduction Linda McNeill, Director Investor Relations CEO remarks and operational highlights Jonathan Baliff, President and CEO Current and future financial performance John Briscoe, SVP and CFO Closing remarks Jonathan Baliff, President and CEO Questions an
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-looking statements include statements about our future business, operations, capital expenditures, fleet composition, capabilities
Slide 4: Chief Executive Officer comments
Chief Executive Officer comments Jonathan Baliff, President and CEO 4
Slide 5: Operational safety review
Operational safety review Commercial Air Accident Rate 1 (AAR) per 100,000 Total Recordable Injury Rate 2 (TRIR) per 200,000 flight hours (fiscal year) man hours (cumulative) 3.00 3.00 2.00 2.00 0.96 1.00 1.00 0.59 0.54 0.53 0.53 0.42 0.27 0.31 0.26 0.07 0.00 0.00 0.00 0.00 FY10 FY11 FY12 FY13 FY14
Slide 6: Q1 FY15 highlights
Q1 FY15 highlights • Q1 operating revenue of $437.3M (21.6% increase from Q1 FY14, 8.1% increase from Q4 FY14) • Q1 GAAP EPS of $1.23 (66.2% increase from Q1 FY14, 48.2% increase from Q4 FY14) • Q1 adjusted EPS* of $1.32 (32.0% increase from Q1 FY14, 2.2% decrease from Q4 FY14) • Q1 adjusted EBITDAR
Slide 7: Market environment outlook
Market environment outlook • We continue to see growth in helicopter demand globally • Large helicopter supply continues to be tight with production lines sold out until CY16 while helicopter demand is expected to grow steadily at an average rate of 4% per annum • Offshore exploration projects still
Slide 8: Europe (EBU)
Europe (EBU) • Europe contributed 48% of Bristow operating revenue and 50% of adjusted EBITDAR* in Q1 FY15 • Operating revenue increased 47% to $201.7M in Q1 FY15 from $137.2M in Q1 FY14 with the net addition of four LACE and an overall increase in activity under existing and new contracts over the
Slide 9: UK SAR update
UK SAR update • From the start of the GAP SAR contract in June 1, 2013 through June 30, 2014, we have conducted over 340 missions and rescued and/or assisted over 320 people • Sumburgh and Stornoway bases generated $13.0M of operating revenue in Q1 FY15 and $50.8M since the beginning of the contract
Slide 10: West Africa (WASBU)
West Africa (WASBU) • Nigeria contributed 19% of Bristow operating revenue and 15% of adjusted EBITDAR* in Q1 FY15 • Operating revenue increased to $80.0M in Q1 FY15 from $75.8M in Q1 FY14 due to improved LACE rates • Adjusted EBITDAR decreased to $20.4M in Q1 FY15 from $23.7M in Q1 FY14 and adjuste
Slide 11: North America (NABU)
North America (NABU) • North America contributed 14% of Bristow operating revenue and 17% of adjusted EBITDAR* in Q1 FY15 • Operating revenue decreased slightly to $57.5M in Q1 FY15 from $58.2M in Q1 FY14 primarily due to the planned closure of our Alaska operations • Adjusted EBITDAR increased 34.3
Slide 12: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 11% of Bristow operating revenue and 8% of adjusted EBITDAR* in Q1 FY15 • Operating revenue increased by 21.7% to $46.5M in Q1 FY15 from $38.2M in Q1 FY14 • Adjusted EBITDAR increased 62.5% to $11.0M in Q1 FY15 from $6.7M in Q1 FY14 and adjusted EBITDAR marg
Slide 13: Other International (OIBU)
Other International (OIBU) • Other International contributed 8% of Bristow operating revenue and 10% of adjusted EBITDAR* in Q1 FY15 • Operating revenue increased to $35.5M in Q1 FY15 vs. $32.9M in Q1 FY14 due to the start-up of a contract in Tanzania and increased activity in Trinidad • Adjusted EB
Slide 14: Líder update
Líder update • First half of CY14 adjusted EBITDAR decreased 13.2% year-over-year due to delayed contract start-ups and lower fixed wing sales • Absolute BVA contribution to Bristow from Líder was $3.6M* in Q1 FY15 (June 30, 2014) • Adjusted debt to TTM adjusted EBITDAR increased to 3.1x as of June
Slide 15: Financial discussion
Financial discussion John Briscoe, SVP and CFO 15
Slide 16: Financial highlights
Financial highlights: Adjusted EPS and adjusted EBITDAR summary year-over-year Q1 FY14 to Q1 FY15 adjusted EPS bridge $0.15 $0.20 $0.03 $1.32 $1.00 Q1 FY14 Operations Corporate and Other FX Changes Q1 FY15 Q1 FY14 to Q1 FY15 adjusted EBITDAR bridge (in millions) $22.0 $5.9 $2.8 $127.6 $102.5 Q1 FY14
Slide 17: LACE and LACE rate continue to increase
LACE and LACE rate continue to increase led by new technology aircraft and improved utilization/terms Consolidated commercial aircraft Large Aircraft Equivalent (LACE)* 170 LACE* LACE Rate*($ in millions) $12 300 279 264 261 $9.55 250 241 241 $9.34 $10 $8.35 $7.89 160 $7.15 $8 200 158 158 163 153 14
Slide 18: Bristow Value Added drives improving Gross Cash Flow performance
Bristow Value Added (BVA) drives improving Gross Cash Flow (GCF) performance 100 15% 13.0% 90 12.4% 11.8% 11.8% 80 11.2% 12% 70 60 9% 50 40 6% $28.7 30 $24.5 $22.4 20 $12.1 3% 10 $1.5 0 0% Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 • Q1 FY15 absolute BVA is positive $24.5M, $23.0M increase from Q1 FY14
Slide 19: Our progress on BVA yields stronger liquidity
Our progress on BVA yields stronger liquidity for growth, dividends and share repurchases . . . 1 2 Net cash provided by operating activities Total liquidity 300 600 267 530 250 500 231 232 415 204 402 200 400 331 150 151 300 216 261 262 134 100 200 116 326 199 198 50 100 144 140 53 55 26 36 37 0 FY
Slide 20: As we execute on our capital deployment strategy
. . . as we execute on our capital deployment strategy Maintain a strong balance sheet for opportunities • Repurchase debt opportunistically • Improve cash flow and meet leverage targets Focus on cash returns, cash margins and growth • Q1 TTM gross cash flow returns 13% and trending up • Target 10 t
Slide 21: FY15 guidance reaffirmed
FY15 guidance reaffirmed. . . • FY15 adjusted EPS guidance range is reaffirmed at $4.70 - $5.20, excluding special items and aircraft sales. Other specific items include: FY15 guidance Average LACE (Large AirCraft ~161 - 167 Interest expense ~ $30 - $35M Equivalent) Average LACE Rate ~ $9.50 - $10.5
Slide 22: As we continue to deliver strong results in FY15
. . . as we continue to deliver strong results in FY15 • Bristow will continue to proactively participate in UK and industry-wide efforts to dramatically improve safety • Demand for Bristow’s exceptional services continues to be strong • Strong BVA and operating cash flow performance continues • UK
Slide 23: Appendix
3 Bristow WO ~
Slide 24: Organizational chart - as of June 30, 2014
Organizational chart - as of June 30, 2014 Bristow EBU WASBU NABU AUSBU OIBU BRS Academy 46 % 18% 13% 11% 8% 4%* UK – 79/6 Nigeria – 47/6 U.S. GoM – 61/6 Australia – 29/10 Brazil – 11/4 Florida – 54/1 Norway – 21/4 Canada – 8/2 Louisiana – 13/1 Egypt – –/ – Nevada – 3/1 Malaysia - 2/1 Lider - 86 U.K
Slide 25: Aircraft Fleet – medium and large
Aircraft Fleet – medium and large as of June 30, 2014 Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large capacity 16-25 passengers Large Helicopters AS332 L Super Puma 18 Twin Turbine 18 - 18 - AW189 16 Twin Turbine 2 - 2 15 EC175 16 Twin Turbine - - - 5 EC225 19 Twin Turbine 22 - 22
Slide 26: Aircraft Fleet – small, training and fixed
Aircraft Fleet – small, training and fixed as of June 30, 2014 (continued) Aircraft Small capacity 4-7 passengers Type No. of PAX Engine Consl Unconsl Total Ordered Small Helicopters Agusta A109 6 Twin Turbine - 1 1 AS 350BB 4 Turbine - 2 2 Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 5 6
Slide 27: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of June 30, 2014 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 1 20 21 21 61 34% WASBU - 1 1 2 2 23 7% NABU 1 13 4 18 11 33 33% AUSBU 2 2 4 8 6 23 24% OIBU - - - - - 25 - Total 3 17 2
Slide 28: Consolidated fleet changes and aircraft sales for Q1 FY15
Consolidated fleet changes and aircraft sales for Q1 FY15 Fleet changes Held for sale aircraft in consolidated fleet Small Medium Large Training Total Q1 FY15 Fleet Count Beginning 363 EBU - - 5 - 5 Delivered WASBU - 2 - - 2 Large 6 NABU - - - - - Medium 3 AUSBU - - 1 - 1 Total Delivered 9 OIBU 2 4
Slide 29: 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 June 30, 2014 2,3 Op revenue1 LACE LACE Rate EBU $162 61 $10.60 WASBU 80 23 14.21 NABU 58 33 7.02 AUSBU 47 23 8.27 OIBU 36 25 5.80 4 Total $390 163 $9.55 1) $ in millions 2) LACE rate is annualized 3) $ in
Slide 30: 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 31: Historical LACE rate by BU
Historical LACE rate by BU LACE Rate 1,2 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 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5
Slide 32: Order and options book as of June 30, 2014
Order and options book as of June 30, 2014 1 ORDER BOOK OPTIONS BOOK Helicopter Helicopter # Class Delivery Date # Class Delivery Date Location Contracted 1 Large September 2015 1 Large September 2014 EBU 1 Medium September 2015 2, 3 2 Large September 2014 EBU 1 of 2 1 Large December 2015 1 Large Se
Slide 33: Order and options book (continued)
Order and options book as of June 30, 2014 (continued) UK SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 1 Large September 2014 EBU 1 of 1 1 Large September 2014 EBU 1 of 1 2 Large December 2014 EBU 2 of 2 2 Large December 2014 EBU 2 of 2 2 Large March 2015 EBU 2 of 2
Slide 34: Adjusted EBITDAR margin trend
Adjusted EBITDAR margin* trend FY12 FY13 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year EBU 33.0% 31.4% 30.7% 36.1% 32.9% 32.2% 34.6% 39.5% 38.3% 36.2% WASBU 29.5% 35.5% 37.2% 36.6% 35.0% 31.9% 26.5% 35.0% 31.8% 31.5% NABU 14.3% 20.6% 14.8% 19.4% 17.3% 23.2% 20.7% 29.1% 29.5% 25.7% AUSBU 20.2% 14.4% 23
Slide 35: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2012 3/31/2013 ($ in millions) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Net income $21.2 $3.0 $26.5 $14.6 $65.2 $24.2 $30.4 $36.7 $40.4 $131.7 Income tax expense 6.6 -1.9 7.1 2.4 14.2 6.2 8.3 7.8 12.7 35.0 Interest expense 9.0 9.5 9.8 10.0
Slide 36: Bristow Value Added sample calculation
Bristow Value Added (BVA) Sample calculation for Q1 FY15 and Q1 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q1 FY15 $24.5 = $121.2* - ( $3,683* X 2.625%**) Bristow Value Added calculation for
Slide 37: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation (in millions) Gross cash flow reconciliation Q1 FY14 Q1 FY15 Net Income $26.9 $44.1 Depreciation and amortization 22.8 25.3 Interest expense 20.4 7.4 Interest income (0.1) (0.2) Rent 23.1 33.1 Other income/expense-net 1.4 1.2 Gain/loss on asset sale 1.7 (0.6) S
Slide 38: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q1 FY14 Q1 FY15 Total assets $3,058 $3,541 Accumulated depreciation 507 536 Capitalized operating leases 315 423 Cash and cash equivalents (160) (134) Investment in unconsolidated enti
Slide 39: Líder Bristow Value Added sample calculation
Líder Bristow Value Added (BVA) Sample calculation for Q1 FY15 and Q1 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q1 FY15 $3.6 = $10.7* - ( $269* X 2.625%**) Bristow Value Added calculation f
Slide 40: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation ($ in millions) Gross cash flow reconciliation Q1 FY14Q1 FY15 Net income (loss) $ 16.6 $ 12.5 Depreciation and amortization 4.3 3.4 Rent 6.4 7.4 Interest expense 3.8 3.7 Interest income (1.7) (1.5) FX (gains) losses 0.1 1.1 Other income/expense-net (0.1) (0.2) Ea
Slide 41: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation ($ in millions) Adjusted gross operating assets reconciliation Q1 FY14 Q1 FY15 Total assets $ 594 $ 623 Cash and cash equivalents (87) (76) Accumulated depreciation 77 80 Capitalized operating leases 127 149 Assets from discontinued operations 0 0
Slide 42: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation ($ in millions) Q3 CY13Q4 CY13Q1 CY14Q2 CY14 Gross revenue $ 116.8 $ 119.3 $ 121.2 $ 113.7 (-) Revenue deductions (6.6) (7.6) (5.9) (7.3) Net operating revenue 110.2 111.3 115.3 106.4 (-) Cost of products and services (84.2) (87.0) (90.8) (79.5) Gross profit
Slide 43: GAAP reconciliation
GAAP reconciliation Three Months Ended June 30, 2014 2013 (In thousands, except per share amounts) Adjusted operating income........................................................................ $ 69,304 $ 57,840 Gain (loss) on disposal of assets....................................................
Slide 44: Bristow leverage reconciliation
Bristow leverage reconciliation (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of June 30, 2014 $ 955.1 $ 1,783.4 $ 2,738.5 34.9% Adjust for: Unfunded Pension Liability 82.4 82.4 NPV of Lease Obligations 391.3 391.3 Letters of credit 2.2 2.2 Adjusted $ 1,431.0 (d) $ 1,783.4 $ 3,214.4 44.5% Calcu
Slide 45: Líder leverage reconciliation
Líder leverage reconciliation (in millions) Sep-13 Jun-14 Total book debt $ 279 $ 290 NPV of leases 75 59 Total adjusted debt 354.0 348.6 TTM adjusted EBITDAR $ 124.6 $ 114.0 Adjusted debt / TTM adj. EBITDAR 2.8x 3.1x 45
Slide 46: Contact us
Contact us Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4 th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com 46