Bristow Group, Inc. · NYSE:VTOL
Bristow — Q1 FY2014 Earnings Presentation
41 slides from Bristow's earnings presentation, Aug 6, 2013
Slide 1: First Quarter FY14 Earnings Presentation
Exhibit 99.1 First Quarter FY14 Earnings Presentation Bristow Group Inc. August 6, 2013
Slide 2: First quarter earnings call agenda
First 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-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 Total Recordable Injury Rate* per 200,000 Commercial Air Accident Rate* per 100,000 man-hours (cumulative) Flight Hours (Fiscal Year) Lost Work Case Rate* per 200,000 man-hours (cumulative) * Includes consolidated commercialoperations only 5
Slide 6: Q1 FY14 highlights
Q1 FY14 highlights • Q1 operating revenue of $359.5M (12.1% increase from Q1 FY13, 2.5% increase from Q4 FY13) • Q1 GAAP EPS of $0.74 (13.8% increase from Q1 FY13, 33.3% decrease from Q4 FY13) • Q1 adjusted EPS* of $1.00 (23.5% increase from Q1 FY13, 1% decrease from Q4 FY13) • Q1 adjusted EBITDAR*
Slide 7: Market environment outlook
Market environment outlook • Oil demand expected to steadily increase, driven by international growth, with oil prices expected to remain above $100 per barrel through 2013 • 2014 client capital expenditures are forecast to increase by ~10%, with a major focus on development of deep-water fields in
Slide 8: EC225 fleet update
EC225 fleet update • Eurocopter has indicated that the definitive solution to the EC225 gear shaft failure will be a gear shaft redesign with earliest availability expected in mid- CY14 • Interim solutions are being implemented pursuant to regulatory authorities’ airworthiness approvals which includ
Slide 9: Europe (EBU)
Europe (EBU) • Europe represented 40% of Bristow operating revenue and 38% of adjusted EBITDAR* in Q1 FY14 • Operating revenue increased to $137.2M in Q1 FY14 from $123.2M in Q1 FY13 with the addition of nine large a/c over the comparable quarter • Adjusted EBITDAR increased to $41.5M in Q1 FY14 fro
Slide 10: UK SAR update
UK SAR update • Four GAP SAR a/c now operational Stornoway started on 7/1/2013 from Sumburgh and Stornoway bases Sumburgh • Since the GAP SAR start date we have Inverness started on 6/1/2013 conducted over 50 missions • Contracts signed for seven S-92s and 11 AW189 a/c to be delivered in FY15 Prestw
Slide 11: West Africa (WASBU)
West Africa (WASBU) • Nigeria represented 22% of Bristow operating revenue and 21% of adjusted EBITDAR* in Q1 FY14 • Operating revenue increased by 14.2% to $75.8M in Q1 FY14 from $66.4M in Q1 FY13 due to increased pricing, ad hoc flying and new contracts • Adjusted EBITDAR increased to $23.7M in Q1
Slide 12: North America (NABU)
North America (NABU) • North America represented 17% of Bristow operating revenue and 15% of adjusted EBITDAR* in Q1 FY14 • Operating revenue increased 10.7% to $58.2M in Q1 FY14 from $52.6M in Q1 FY13 primarily as a result of the addition of eight aircraft dry leased to Cougar in Canada • Adjusted
Slide 13: Australia (AUSBU)
Australia (AUSBU) • Australia represented 11% of Bristow operating revenue and 6% of adjusted EBITDAR* in Q1 FY14 • Operating revenue stayed flat at $38.2M in both Q1 FY14 and Q1 FY13 • Adjusted EBITDAR decreased to $6.8M in Q1 FY14 from $10.3M in Q1 FY13 and adjusted EBITDAR margin decreased to 17.
Slide 14: Other International (OIBU)
Other International (OIBU) • Other International represented 10% of Bristow operating revenue and 20% of adjusted EBITDAR* in Q1 FY14 • Operating revenue slightly decreased to $32.9M in Q1 FY14 vs. $33.2M in Q1 FY13 due to the end of short- term contracts in Guyana and the Baltic Sea • Adjusted EBIT
Slide 15: Financial discussion
Financial discussion Jonathan Baliff, SVP and CFO 15
Slide 16: Financial highlights: Adjusted EPS and EBITDAR summary
Financial highlights: Adjusted EPS and EBITDAR Summary Q1 FY13 to Q1 FY14 adjusted EPS bridge Q1 FY13 to Q1 FY14 adjusted EBITDAR bridge (in millions) Note: Adjusted EPS and adjusted EBITDAR amounts exclude gains and losses on dispositions of assets and any special items during the period. See recon
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 LACE and LACE rate are higher than the pre-financial crisis level with 173-177 LACE and $8.30-8.60 LACE rate guidance * See appendix hereto for more information on LACE and LACE Rate. LACE and LACE Rate
Slide 18: Quarterly BVA is in line with yearly cyclicality
Quarterly BVA is in line with yearly cyclicality Absolute BVA* Q1 FY12 – Q1 FY14 • Q1 FY14 BVA is positive $1.5M, coming in approx. the same as Q1 FY13 • Year-over-year change in BVA is driven by: Organic capital spend was the highest in Bristow’s history Major maintenance on 332L and costs associat
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 * See 10-Q for more information on cash flow provided by operating activities 19
Slide 20: New quarterly dividend policy based on payout ratio
. . . and a new quarterly dividend policy based on payout ratio to provide more predictability • Annualized quarterly dividend policy has been changed to a 20-30% of forward adjusted EPS payout ratio • This is in line with the market as a whole and provides flexibility in various economic and intere
Slide 21: Financial highlights: FY14 guidance is reaffirmed
Financial highlights: FY14 guidance is reaffirmed • FY14 adjusted EPS guidance range of $4.20 -$4.50, excluding special items and a/c sales. Other specific items include: LACE (Large AirCraft Equivalent) ~173 - 177 Interest expense ~ $30 - $35M LACE Rate ~ $8.30 - $8.60M Rent expense (a/c only) ~$85
Slide 22: Conclusions
Conclusions • Safety continues to be our #1 core value as we strive to achieve Target Zero • Clients are turning to Bristow as their provider of choice, recognizing our size, global reach, and financial and operational safety • Continued revenue growth in oil and gas comes from both industry expansi
Slide 23: Appendix
Appendix UAH ZERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 24: Organizational chart - as of June 30, 2013
Organizational chart - as of June 30, 2013 Operated Aircraft Affiliated Aircraft Bristow owned and/or operated Bristow affiliates and joint 353 aircraft as of June 30, 2013 ventures operated 198 aircraft as of June 30, 2013 Key Corporate Business Unit (% of FY13 Operating Revenue) Region ( # of a/c
Slide 25: Aircraft Fleet – Medium and Large
Aircraft Fleet – Medium and Large as of June 30, 2013 Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large Helicopters Large capacity 18-25 passengers AS332L Super Puma 18 Twin Turbine 20 - 20 - AW189 16 Twin Turbine - - - 17 EC175 16 Twin Turbine - - - 5 EC225 25 Twin Turbine 20 - 20 3
Slide 26: Aircraft Fleet – Small, Training and Fixed
Aircraft Fleet – Small, Training and Fixed as of June 30, 2013 (continued) Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small Helicopters Small capacity 4-7 passengers AS350BB 4 Turbine - 2 2 - Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 28 7 35 - Bell 407 6 Turbine 37 - 3
Slide 27: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of June 30, 2013 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 1 17 18 18 57 31% WASBU - 1 - 1 1 21 2% NABU 1 12 2 15 8 37 22% AUSBU 2 - 3 5 4 19 18% OIBU - - - - - 27 - Total 3 14 22
Slide 28: Consolidated fleet changes and aircraft sales for Q1 FY14
Consolidated fleet changes and aircraft sales for Q1 FY14 Fleet changes Held for sale aircraft in consolidated fleet Small Medium Large Total Q1 FY14 Fleet Count Beginning 351 EBU - - - - Delivered WASBU - - - - Large 3 3 NABU 7 - - 7 Medium Total Delivered 6 AUSBU - - - - OIBU 1 4 - 5 Removed Total
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 Q1 FY14 2,3 Op revenue1 LACE LACE Rate EBU $137 57 $9.63 WASBU 76 21 14.26 NABU 58 37 6.34 AUSBU 38 19 8.04 OIBU 33 27 4.97 Total $353 4 161 $8.78 1) $ in millions 2) LACE Rate is annualized 3) $ in millions per
Slide 30: Historical LACE and LACE Rate by BU
Historical LACE and LACE Rate by BU LACE 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 EBU 42 43 48 46 44 46 46 45 47 45 51 55 57 WASBU 24 24 21 22 23 22 22 22 22 22 20 21 21 NABU 39 35 34 29 30 29 30 30 30 31 39 37 37 AUSBU 20 23 24 20 19 20 20 19 18 17 17 19 19 OIBU 33 33 33 38 39 38
Slide 31: Order and options book as of July 11, 2013
Order and options book as of July 11, 2013 ORDER BOOK* OPTIONS BOOK Helicopter Helicopter # Class Delivery Date Location Contracted # Class Delivery Date 1 Medium March 2014 1 Large September 2013 WASBU 1 of 1 1 Large June 2014 1 Large September 2013 EBU 1 of 1 1 Medium June 2014 4 Medium September
Slide 32: Order and options book (continued)
Order and options book as of July 11, 2013 (continued) SAR CONFIGURED ORDER BOOK* Helicopter # Class Delivery Date Location Contracted 2 Large June 2014 EBU 2 of 2 4 Large December 2014 EBU 4 of 4 4 Large March 2015 EBU 4 of 4 2 Large June 2015 EBU 2 of 2 4 Large September 2015 EBU 4 of 4 2 Large De
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 Value Added (BVA) sample calculation
Bristow Value Added (BVA) Sample calculation for Q1 FY14 and Q1 FY13 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q1 FY14 $1.5 = $90.6* - ( $3,394* X 2.625%**) Bristow Value Added calculation for Q
Slide 36: Gross cash flow reconciliation
Gross cash flow reconciliation (in millions) Gross Cash Flow Reconciliation Q1 FY13 Q1 FY14 Net Income $23.7 $26.9 Depreciation and Amortization 21.4 22.8 Interest Expense 8.8 20.4 Interest Income (0.1) (0.1) Rent 16.3 23.1 Other Income/expense-net 0.9 1.4 Earnings of Discontinued Operations - - Gai
Slide 37: Adjusted gross operating assets reconciliation
Adjusted gross operating assets reconciliation (in millions) Adjusted Gross Operating Assets Reconciliation Q1 FY13 Q1 FY14 Total Assets $2,740 $3,058 Accumulated Depreciation 468 507 Capitalized Operating Leases 194 315 Cash and Cash Equivalents (227) (160) Investment in Unconsolidated Entities (20
Slide 38: GAAP reconciliation
GAAP reconciliation (i) See information about special items in 10-Q or earnings release for Q1 FY14 (ii) These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per
Slide 39: Leverage reconciliation
Leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of June 30, 2013 $ 889.8 $ 1,627.9 $ 2,517.7 35.3% Adjust for: Unfunded Pension Liability 121.5 121.5 NPV of Lease Obligations 315.7 315.7 Letters of credit 2.5 2.5 Adjusted $ 1,329.5 (d) $ 1,
Slide 40: Bristow net asset FMV expected to remain resilient
Bristow net asset FMV including UK SAR aircraft are expected to remain resilient and higher than current net asset FMV/share 40
Slide 41: 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 41