Bristow Group, Inc. · NYSE:VTOL
Bristow — Q4 FY2014 Earnings Presentation
42 slides from Bristow's earnings presentation, May 22, 2014
Slide 1: Fourth quarter FY14 earnings presentation
Exhibit 99.1 Fourth quarter FY14 earnings presentation Bristow Group Inc. May 22, 2014
Slide 2: Fourth quarter FY14 earnings call agenda
Fourth quarter FY14 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 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 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 0.40 0.44 0.41 0.36 0.32 0.5 0.29 0.26 0.22 3 0 A M J J A S O N D J F M FY14 2 Total Recordable Injury Rate* per 200,000
Slide 6: Q4 and FY14 highlights
Q4 and FY14 highlights • Q4 operating revenue of $404.6M (15.4% increase • FY14 operating revenue of $1.5B (12.8% increase from Q4 FY13, 8.3% increase from Q3 FY14) from FY13) • Q4 GAAP EPS of $0.83 (25.2% decrease from Q4 • FY14 GAAP EPS of $5.09 (42.6% increase from FY13, 62.7% increase from Q3 FY
Slide 7: Europe (EBU)
Europe (EBU) • Europe contributed 44% of Bristow operating revenue and 45% of adjusted EBITDAR* in Q4 FY14 • Operating revenue increased to $170.7M in Q4 FY14 from $129.3M in Q4 FY13 with the net addition of seven LACE and an overall increase in activity under new contracts over the comparable quart
Slide 8: CAP 1145 will make the helicopter industry safer
CAP 1145 will make the helicopter industry safer The UK CAA proposed new rules are designed to increase safety in the North Sea. Some of the actions include: No offshore flights if the sea state exceeds level 6 (June 1, 2014). No offshore flights if the sea state exceeds the certified ditching perfo
Slide 9: UK SAR update
UK SAR update • From the start of the GAP SAR contract in June 1, 2013 through March 31, 2014, we have conducted 233 missions and rescued and/or assisted 205 persons • Sumburgh and Stornoway bases generated $12.6M of revenue in Q4 FY14 and $37.7M since the beginning of the contract • Construction of
Slide 10: West Africa (WASBU)
West Africa (WASBU) • Nigeria contributed 22% of Bristow operating revenue and 20% of adjusted EBITDAR* in Q4 FY14 • Operating revenue increased by 13.2% to $83.8M in Q4 FY14 from $74.0M in Q4 FY13 due to improved LACE rates, ad hoc flying and increased utilization • Adjusted EBITDAR increased to $2
Slide 11: North America (NABU)
North America (NABU) • North America contributed 14% of Bristow operating revenue and 14% of adjusted EBITDAR* in Q4 FY14 • Operating revenue decreased slightly to $55.6M in Q4 FY14 from $56.3M in Q4 FY13 primarily due to a reduction in LACE • Adjusted EBITDAR increased 18.3% to $19.7M in Q4 FY14 vs
Slide 12: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 10% of Bristow operating revenue and 7% of adjusted EBITDAR* in Q4 FY14 • Operating revenue stayed flat at $40.6M in Q4 FY14 relative to Q4 FY13 • Adjusted EBITDAR decreased to $9.7M in Q4 FY14 from $10.6M in Q4 FY13 and adjusted EBITDAR margin decreased to
Slide 13: Other International (OIBU)
Other International (OIBU) • Other International contributed 10% of Bristow operating revenue and 14% of adjusted EBITDAR* in Q4 FY14 • Operating revenue increased to $38.0M in Q4 FY14 vs. $34.8M in Q4 FY13 due to start-up contract in Tanzania and increased activity in Trinidad • Adjusted EBITDAR in
Slide 14: Financial discussion
Financial discussion Jonathan Baliff, SVP and CFO 14
Slide 15: Financial highlights: Adjusted EPS summary
Financial highlights: Adjusted EPS summary Q4 FY13 to Q4 FY14 adjusted EPS bridge $0.16 $0.02 $0.16 $1.35 $1.01 Q4 FY13 Operations Corporate and Other FX Changes Q4 FY14 FY13 to FY14 adjusted EPS bridge $0.42 $0.09 $0.34 $4.45 $3.78 FY13 Operations Corporate and Other FX Changes FY14 * Adjusted EPSa
Slide 16: Financial highlights: Adjusted EBITDAR summary
Financial highlights: Adjusted EBITDAR summary Q4 FY13 to Q4 FY14 adjusted EBITDAR bridge (in millions) $1.0 $0.9 $122.9 $19.8 $103.0 Q4 FY13 Operations Corporate and Other FX Changes Q4 FY14 FY13 to FY14 adjusted EBITDAR bridge (in millions) $53.0 $4.2 $4.5 $433.7 $381.0 FY13 Operations Corporate a
Slide 17: LACE and LACE rate continue to increase
LACE and LACE rate continue to increase led by new technology a/c and improved utilization/terms Consolidated commercial aircraft Large Aircraft Equivalent (LACE)* LACE* ($ in millions) LACE Rate* 300 170 $12 279 264 261 $10.00 250 241 $9.34 $10 $8.35 $7.89 200 160 $7.15 $8 164 153 158 158 149 150 $
Slide 18: Recent quarterly and yearly BVA
Recent quarterly and yearly BVA: Significant year-over-year improvement in FY14 Absolute BVA* Q1 FY13Q4 – FY14 • Q4 FY14 BVA is positive $28.7M 35 30 28.7 • FY14 consolidated BVA is 25 22.4 positive $64.7M, a $42.0M 20 increase from FY13 15 12.1 10 9.3 9.4 • Positive year-over-year change in 5 1.9 2
Slide 19: Progress on BVA yields stronger liquidity for growth
Our progress on BVA yields stronger liquidity for growth and record dividends and share repurchases . . . Net cash provided by operating activities* Total liquidity 300 600 530 250 500 415 402 204 200 400 150 300 216 261 262 267 231 232 100 195 200 178 116 151 326 78 50 100 199 144 140 100 0 - FY10
Slide 20: Net asset FMV provides consistent strategy for share buy backs
. . . as Bristow’s net asset FMV provides a consistent strategy for our share buy backs $95 $85 $83.39 $76.44 $75 $69.44 $65 $55 $48.63 $45 $35 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Book value of equity per share Net asset FMV per share Average st
Slide 21: FY15 guidance reflects growing contributions from investments
FY15 guidance reflects the growing contributions from our investments . . . • FY15 adjusted EPS guidance range is $4.70 - $5.20, excluding special items and a/c sales. Other specific items include: FY15 guidance Average LACE (Large AirCraft ~161 - 167 Interest expense ~ $30 - $35M Equivalent) Averag
Slide 22: As the legacy continues
. . . as the legacy continues • Bristow will strive to achieve Target Zero and participate in UK and industry-wide efforts to dramatically improve safety • Management kept its financial promises in FY14 as we continued to differentiate ourselves with passion and discipline on our clients’ behalf • S
Slide 23: Appendix
Appendix BEC ERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 24: Organizational chart - as of March 31, 2014
Organizational chart - as of March 31, 2014 Operated Aircraft Affiliated Aircraft Bristow owned and/or operated 363 Bristow affiliates and joint aircraft as of March 31, 2014 ventures operated 131 aircraft as of March 31, 2014 Key Corporate Business Unit (% of FY14 operating revenue) Region ( # of a
Slide 25: Aircraft Fleet – medium and large
Aircraft Fleet – medium and large as of March 31, 2014 Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large Helicopters Large capacity 16-25 passengers AS332 L Super Puma 18 Twin Turbine 18 - 18 - AW189 16 Twin Turbine - - - 17 EC175 16 Twin Turbine - - - 5 EC225 19 Twin Turbine 20 - 20
Slide 26: Aircraft Fleet – small, training and fixed
Aircraft Fleet – small, training and fixed as of March 31, 2014 (continued) Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small capacity 4-7 passengers Small Helicopters Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 9 6 15 - Bell 407 6 Turbine 35 - 35 - BK-117 7 Twin Turbine
Slide 27: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of March 31, 2014 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 1 20 21 21 56 37% WASBU - 1 1 2 2 23 7% NABU 5 13 4 22 12 34 35% AUSBU 2 2 4 8 6 22 25% OIBU - - - - - 24 - * Total 7 1
Slide 28: Consolidated fleet changes and aircraft sales for Q4 FY14
Consolidated fleet changes and aircraft sales for Q4 FY14 Fleet changes Held for sale aircraft in consolidated fleet Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 FY14 Small Medium Large Training Total Fleet Count Beginning 351 353 350 345 351 Delivered EBU - - 5 - 5 Large 3 2 4 2 11 WASBU - 2 - - 2 Medium 2 3 3
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 March 31, 2014 1 2,3 Op revenue LACE LACE Rate EBU $607 56 $10.84 WASBU 315 23 13.99 NABU 229 34 6.84 AUSBU 149 22 6.76 OIBU 134 24 5.57 4 Total $1,475 158 $9.34 1) $ in millions 2) LACE rate is annualized
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 Rate1,2 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 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5.
Slide 32: Order and options book as of March 31, 2014
Order and options book as of March 31, 2014 1 ORDER BOOK OPTIONS BOOK Helicopter Helicopter # Class Delivery Date # Class Delivery Date Location Contracted 1 Large June 2015 2 Medium June 2014 OIBU 1 of 2 1 Medium June 2015 1 Medium June 2014 AUSBU 2 Large September 2015 3 Large June 2014 EBU 2 of 3
Slide 33: Order and options book (continued)
Order and options book as of March 31, 2014 (continued) UK SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 1 Large September 2014 EBU 1 of 1 1 Large September 2014 EBU 1 of 1 2 Large December 2014 EBU 2 of 2 2 Large December 2014 EBU 2 of 2 2 Large March 2015 EBU 2 of
Slide 34: Adjusted EBITDAR margin trend
Adjusted EBITDAR margin* trend FY11 FY12 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year EBU 29.8% 31.5% 34.6% 34.4% 32.7% 33.0% 31.4% 30.7% 36.1% 32.9% WASBU 33.7% 36.9% 35.8% 34.3% 35.2% 29.5% 35.5% 37.2% 36.6% 35.0% NABU 20.8% 25.8% 15.9% 8.5% 18.5% 14.3% 20.6% 14.8% 19.4% 17.3% AUSBU 33.2% 26.1% 27.
Slide 35: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2011 3/31/2012 ($ in millions) Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD 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 9.9 46.2 9.0 9
Slide 36: Net asset fair market value (FMV) per share calculation
Net asset fair market value (FMV) per share calculation UK SAR contribution March 31, 2014 FY16 - FY17 Implied (in millions) (+) FMV of a/c $2,000 $88 $2,088 (+) FMV of leased a/c 919 391 1,310 (+) NBV of PPE w/o a/c 637 113 750 (+) Working capital 264 174 438 (-) LT debt (827) (88) (915) (-) Leased
Slide 37: Bristow Value Added (BVA) sample calculation
Bristow Value Added (BVA) Sample calculation for Q4 FY13 and Q4 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q4 FY14 $28.7 = $119.4* - ( $3,455* X 2.625%**) Bristow Value Added calculation for
Slide 38: Gross cash flow reconciliation
Gross cash flow reconciliation (in millions) Gross cash flow reconciliation Q4 FY13 Q4 FY14 Net Income $40.4 $30.3 Depreciation and amortization 26.7 25.6 Interest expense 10.3 8.2 Interest income (0.3) (0.4) Rent 18.3 31.1 Other income/expense-net (0.4) 2.1 Gain/loss on asset sale (7.2) (0.1) Speci
Slide 39: Adjusted gross operating assets reconciliation
Adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q4 FY13 Q4 FY14 Total assets $2,951 $3,398 Accumulated depreciation 494 523 Capitalized operating leases 327 428 Cash and cash equivalents (216) (204) Investment in unconsolidated entities (27
Slide 40: GAAP reconciliation
GAAP reconciliation Three Months Ended Twelve Months Ended March 31, March 31, 2014 2013 2014 2013 (In thousands, except per share amounts) Adjusted operating income…………………………………………….. $ 68,401 $ 57,348 $ 233,459 $ 217,348 Gain (loss) on disposal of assets………………………………. 81 7,249 (722) 8,068 (i) Speci
Slide 41: Leverage reconciliation
Leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of March 31, 2014 $ 841.3 $ 1,756.6 $ 2,597.9 32.4% Adjust for: Unfunded Pension Liability 86.8 86.8 NPV of Lease Obligations 411.6 411.6 Letters of credit 2.7 2.7 Adjusted $ 1,342.4 (d) $ 1,7
Slide 42: Contact Us
Contact Us Bristow Group Inc. (NYSE: BRS) th 2103 City West Blvd., 4 Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com 42