Bristow Group, Inc. · NYSE:VTOL
Bristow — Q3 FY2014 Earnings Presentation
45 slides from Bristow's earnings presentation, Feb 7, 2014
Slide 1: Third Quarter FY14 Earnings Presentation
Exhibit 99.1 Third Quarter FY14 Earnings Presentation Bristow Group Inc. February 7, 2014
Slide 2: Third quarter earnings call agenda
Third 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 Commercial Air Accident Rate* per 100,000 Lost Work Case Rate* per 200,000 flight hours (fiscal year) man hours (cumulative) FY13 FY14 Total Recordable Injury Rate* per 200,000 man hours (cumulative) FY13 FY14 * Includes consolidated commercial operations only 5
Slide 6: Q3 FY14 highlights
Q3 FY14 highlights • Q3 operating revenue of $373.6M (7.8% increase from Q3 FY13, 1.3% decrease from Q2 FY14) • Q3 GAAP EPS of $0.51 (49% decrease from Q3 FY13, 83.1% decrease from Q2 FY14) • Q3 adjusted EPS* of $0.85 (27.4% decrease from Q3 FY13, 33.1% decrease from Q2 FY14) • Q3 adjusted EBITDAR*
Slide 7: Europe (EBU)
Europe (EBU) • Europe contributed 44% of Bristow operating revenue and 48% of adjusted EBITDAR* in Q3 FY14 • Operating revenue increased to $158.5M in Q3 FY14 from $124.4M in Q3 FY13 with the net addition of eight LACE and an overall increase in activity under new contracts over the comparable quart
Slide 8: UK SAR update
UK SAR update • From the start of the GAP SAR contract in June 1, 2013 through December 31, 2013, we have conducted 169 missions and rescued and/or assisted 151 persons • Sumburgh and Stornoway bases generated $12.1M of revenue in Q3 FY14 and $25.1M since the beginning of the contract • Construction
Slide 9: Bristow Helicopters investing in Eastern Airways
CHANGE: Bristow Helicopters is making an investment in Eastern Airways, a UK regional fixed-wing oil and gas focused transport company • Bristow Helicopters Limited (Bristow Helicopters) purchased a 60% interest in the privately owned Eastern Airways International Limited (Eastern Airways) • Eastern
Slide 10: Eastern Airways provides scale, stability and positive financial impact for EBU
Eastern Airways provides scale, stability and positive financial impact (with less capital) for EBU • Bristow Helicopters and Eastern Airways are culturally aligned with shared core values of safety, quality and service • Bristow Helicopters and Eastern Airways have a long standing relationship work
Slide 11: West Africa (WASBU)
West Africa (WASBU) • Nigeria contributed 22% of Bristow operating revenue and 23% of adjusted EBITDAR* in Q3 FY14 • Operating revenue increased by 3.8% to $79.4M in Q3 FY14 from $76.5M in Q3 FY13 due to improved pricing, ad hoc flying and increased activity • Adjusted EBITDAR decreased slightly to
Slide 12: North America (NABU)
North America (NABU) • North America contributed 15% of Bristow operating revenue and 16% of adjusted EBITDAR* in Q3 FY14 • Operating revenue decreased to $54.9M in Q3 FY14 from $59.3M in Q3 FY13 primarily due to a decline in the number of small a/c on contract • Adjusted EBITDAR increased 5% to $18
Slide 13: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 10% of Bristow operating revenue and 4% of adjusted EBITDAR* in Q3 FY14 • Operating revenue decreased to $34.6M in Q3 FY14 from $41.6M in Q3 FY13 due to the ending of short term contracts and the negative impact of foreign currency exchange rates • Adjusted
Slide 14: Other International (OIBU)
Other International (OIBU) • Other International contributed 9% of Bristow operating revenue and 9% of adjusted EBITDAR* in Q3 FY14 • Operating revenue decreased to $30.8M in Q3 FY14 vs. $32.0M in Q3 FY13 due to a decline in aircraft on contract in Malaysia • Adjusted EBITDAR decreased to $10.2M in
Slide 15: Financial discussion
Financial discussion Jonathan Baliff, SVP and CFO 15
Slide 16: Financial highlights Q3
Financial highlights Q3: Adjusted EPS and adjusted EBITDAR summary Q3 FY13 to Q3 FY14 adjusted EPS bridge $0.01 $0.25 $0.08 $1.17 $0.85 Q3 FY13 Operations Corporate and Other FX Changes Q3 FY14 Q3 FY13 to Q3 FY14 adjusted EBITDAR bridge (in millions) $3.2 $109.2 $1.8 $3.5 $100.7 Q3 FY13 Operations C
Slide 17: Financial highlights YTD
Financial highlights YTD: Adjusted EPS and adjusted EBITDAR summary YTD FY13 to YTD FY14 adjusted EPS bridge $0.11 $0.10 $0.33 $2.77 $3.11 YTD FY13 Operations Corporate and Other FX Changes YTD FY14 YTD FY13 to YTD FY14 adjusted EBITDAR bridge (in millions) $5.2 $5.2 $33.0 $278.0 $311.0 YTD FY13 Ope
Slide 18: LACE and LACE rate continue to increase
LACE and LACE rate continue to increase led by new technology a/c and improved utilization/terms FY14 average LACE guidance of 160 - 164 and average LACE rate guidance of $8.95 - $9.25 are reaffirmed * See appendix hereto for more information on LACE and LACE rate. Consolidated commercial aircraft,
Slide 19: Revenue growth and capital efficiency drive quarterly BVA improvement
Combination of revenue growth and capital efficiency drives quarterly BVA improvement Absolute BVA* Q3 FY12 – Q3 FY14 • Q3 FY14 BVA is positive $12.1M, an improvement of $2.8M over Q3 FY13 • YTD FY14 consolidated BVA is positive $36.0M, a $22.7M increase from YTD FY13 • Year-over-year change in BVA
Slide 20: 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 178 * See 10-Q for more information on cash flow provided by operating activities 20
Slide 21: FY14 guidance reaffirmed
… with FY14 guidance reaffirmed • FY14 adjusted EPS guidance reaffirmed to $4.25 - $4.55, excluding special items and a/c sales. Other specific items include: FY14 guidance Average LACE ~160 - 164 Interest expense ~ $30 - $35M Average LACE rate ~ $8.95 - $9.25M Rent expense (a/c only) ~$85 - $90M G
Slide 22: Moving forward with Operational Excellence
Moving forward with Operational Excellence: The efforts have been ongoing at Bristow since 2012 • Since February 2012, we have focused on an integrated company-wide project to move Bristow towards Operational Excellence through standardization and simplification. Our first efforts include: eFlight (
Slide 23: Conclusions
Conclusions • Safety continues to be our #1 core value as we strive to achieve Target Zero and participate in industry efforts to share best practices • Revenue growth continues as clients turn to Bristow as their provider of choice due to our global reach, financial strength, and ongoing Operationa
Slide 24: Appendix
Appendix BERG@ ZERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 25: Organizational chart - as of December 31, 2013
Organizational chart - as of December 31, 2013 Operated Aircraft Affiliated Aircraft Bristow owned and/or operated 345 Bristow affiliates and joint aircraft as of December 31, 2013 ventures operated 126 aircraft as of December 31, 2013 Key Corporate Business Unit (% of Q3 FY14 operating revenue) Reg
Slide 26: Aircraft Fleet – medium and large
Aircraft Fleet – medium and large as of December 31, 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 19 - 19 - AW189 16 Twin Turbine - - - 17 EC175 16 Twin Turbine - - - 5 EC225 19 Twin Turbine 20 -
Slide 27: Aircraft Fleet – small, training and fixed
Aircraft Fleet – small, training and fixed as of December 31, 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 19 6 25 - Bell 407 6 Turbine 36
Slide 28: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of December 31, 2013 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 1 21 22 22 59 37% WASBU - 1 1 2 2 22 7% NABU 4 13 3 20 11 34 31% AUSBU 2 2 4 8 6 20 28% OIBU - - - - - 28 - Total 6
Slide 29: Consolidated fleet changes and aircraft sales for Q3 FY14
Consolidated fleet changes and aircraft sales for Q3 FY14 Fleet changes Q1 FY14 Q2 FY14 Q3 FY14 YTD Held for sale aircraft in consolidated fleet Fleet Count Beginning 351 353 350 351 Small Medium Large Training Total Delivered EBU - - 2 - 2 Large 3 2 4 9 Medium 2 3 3 8 WASBU - 2 - - 2 Total Delivere
Slide 30: 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 December 31, 2013 1 2,3 Op revenue LACE LACE rate EBU $452 59 $10.30 WASBU 231 22 14.17 NABU 174 34 6.75 AUSBU 108 20 7.21 OIBU 95 28 4.58 4 Total $1,091 162 $8.97 1) $ in millions 2) LACE rate is annualiz
Slide 31: 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 32: 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 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5.
Slide 33: Order and options book as of December 31, 2013
Order and options book as of December 31, 2013 ORDER BOOK¹ OPTIONS BOOK Helicopter Helicopter # Class Delivery Date Location Contracted # Class Delivery Date 1 Medium March 2014 OIBU 1 of 1 2 Medium March 2015 1 Medium March 2014 NABU 1 Large June 2015 2 Large March 2014 EBU 1 of 2 3 Medium June 201
Slide 34: Order and options book (continued)
Order and options book as of December 31, 2013 (continued) UK SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 3 Large September 2014 EBU 3 of 3 2 Large March 2015 EBU 2 of 2 2 Large June 2015 EBU 2 of 2 2 Large September 2015 EBU 2 of 2 2 Large December 2015 EBU 2 of 2
Slide 35: Adjusted EBITDAR margin trend
Adjusted EBITDAR margin* trend FY11 FY12 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year EBU 29.8% 31.5% 34.6% 34.4% 32.7% 33.0% 31.4% 30.7% 36.1% 32.9% WASBU 33.7% 36.9% 35.8% 34.3% 35.2% 29.5% 35.5% 37.2% 36.6% 35.0% NABU 20.8% 25.8% 15.9% 8.5% 18.5% 14.3% 20.6% 14.8% 19.4% 17.3% AUSBU 33.2% 26.1% 27.
Slide 36: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2011 3/31/2012 ($ 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 37: Bristow stock price reflects improved operational performance and shareholder returns
Bristow stock price reflects improved operational performance and increasing shareholder returns Note: The net asset FMV per share does not include our UK SAR aircraft 37
Slide 38: Net asset fair market value per share calculation
Net asset fair market value (FMV) per share calculation as of December 31, 2013 (in millions) (+) FMV of a/c $ 1,949 (+) FMV of leased a/c 873 (+) NBV of PPE w/o a/c 540 (+) Working capital 481 (-) LT debt (833) (-) Leased imputed debt (394) (-) Pension liability (125) Net asset FMV $ 2,492 # of com
Slide 39: Bristow Value Added sample calculation Q2 FY14 and Q2 FY13
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 $22.4 = $109.2* - ( $3,309* X 2.625%**) Bristow Value Added calculation for
Slide 40: Bristow Value Added sample calculation Q3 FY14 and Q3 FY13
Bristow Value Added (BVA) Sample calculation for Q3 FY14 and Q3 FY13 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF - ( GOA X 10.5%** ) Bristow Value Added calculation for Q3 FY14 $12.1 = $100.8* - ( $3,378* X 2.625%**) Bristow Value Added calculation for
Slide 41: Gross cash flow reconciliation
Gross cash flow reconciliation 41
Slide 42: Adjusted gross operating assets reconciliation
Adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q2 FY13 Q3 FY13 Q2 FY14 Q3 FY14 Total assets $2,785 $3,051 $3,166 $3,277 Accumulated depreciation 464 480 518 530 Capitalized operating leases 225 244 373 419 Cash and cash equivalents (348) (
Slide 43: GAAP reconciliation
GAAP reconciliation (i) See information about special items in 10-Q or earnings release for Q3 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 44: Leverage reconciliation
Leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of December 31, 2013 $ 841.6 $ 1,762.9 $ 2,604.5 32.3% Adjust for: Unfunded Pension Liability 125.0 125.0 NPV of Lease Obligations 393.6 393.6 Letters of credit 2.4 2.4 Adjusted $ 1,362.6 (d)
Slide 45: 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 45