Bristow Group Reports Fourth Quarter And Full Fiscal Year 2021 Results

HOUSTON, May 26, 2021 /PRNewswire/ --

• Net loss of $42.6 million, or $1.47 per diluted share, in Q4 FY21
• EBITDA adjusted to exclude special items and asset dispositions was $30.5 million in Q4
• Adjusted Free Cash Flow was $54.9 million in Q4 FY21
• As of March 31, 2021, unrestricted cash balance was $228.0 million with total liquidity of $284.1 million
• During Q4, the Company closed a private offering of $400 million aggregate principal amount of 6.875% senior secured notes and used a portion of the net proceeds, together with cash on hand, to repay certain term loans and to redeem its 7.750% senior unsecured notes (the "Refinancing")

Bristow Group Inc. (NYSE: VTOL) today reported net loss attributable to the Company of $42.6 million, or $1.47 per diluted share, for its fiscal fourth quarter ended March 31, 2021 ("current quarter") on operating revenues of $281.5 million compared to net loss attributable to the Company of $57.1 million, or $1.97 per diluted share, for the quarter ended December 31, 2020 ("preceding quarter") on operating revenues of $300.3 million. The primary drivers of the net loss in the current quarter were the recognition of losses on the extinguishment of debt and merger-related costs.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $(32.2) million in the current quarter compared to $(12.7) million in the preceding quarter. EBITDA adjusted to exclude special items and gains or losses on asset dispositions was $30.5 million in the current quarter compared to $47.7 million in the preceding quarter. The following table provides a bridge between EBITDA, Adjusted EBITDA and Adjusted EBITDA excluding gains or losses on asset dispositions. See Reconciliation of Non-GAAP Metrics for a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA.

"In addition to challenging market conditions related to the pandemic and depressed offshore oil and gas customer activity, the Company's current quarter results also reflect the typical seasonality in our business, as the March quarter has historically been the period of lowest flight activity due to fewer daylight hours and more inclement weather days," said Chris Bradshaw, President and Chief Executive Officer of Bristow. "Despite the challenging conditions, Bristow generated a substantial amount of free cash flow in the quarter, further demonstrating the resiliency of our business model."

Bristow reported net loss attributable to the Company of $56.1 million, or earnings per diluted share of $2.32, for the fiscal year ended March 31, 2021 ("current year") on operating revenues of $1.1 billion compared to net loss attributable to the Company of $697.2 million on operating revenues of $1.2 billion for the fiscal year ended March 31, 2020 ("prior year"). The net loss in the current year resulted in net earnings per diluted share due to the deemed contribution from conversion of preferred stock included in the income available to shareholders calculation. After the closing of the business combination between Bristow Group Inc. and Era Group Inc. (the "Merger") on June 11, 2020, the current year includes operating results from legacy Era Group Inc. from June 11, 2020 onwards. The prior year and periods ending prior to the Merger date only include operating results of legacy Bristow Group Inc. Furthermore, as a result of the adoption of fresh-start accounting, the Company's consolidated financial statements subsequent to October 31, 2019 ("Successor") may not be comparable to the consolidated financial statements prior to October 31, 2019 ("Predecessor").

Sequential Quarter Results

Operating revenues were $18.8 million lower in the current quarter compared to the preceding quarter.

Operating revenues from oil and gas operations were $21.4 million lower than the preceding quarter. During the current quarter, the Company changed its revenue recognition method for leases to Cougar Helicopters Inc. ("Cougar") to cash basis recognition, resulting in $9.1 million lower revenues in Canada. Furthermore, revenues decreased due to lower utilization in the Americas, Africa and Asia Pacific regions.

Operating revenues from U.K. SAR services were $2.8 million higher in the current quarter primarily due to the strengthening of the British pound sterling ("GBP") relative to the U.S. dollar. Operating revenues from fixed wing services were $1.9 million higher in the current quarter primarily due to the strengthening of the Australian dollar ("AUD") relative to the U.S. dollar and higher utilization. Operating revenues from other services were $2.0 million lower due to higher part sales in the preceding quarter.

Operating expenses were $8.7 million lower in the current quarter. Lower personnel costs, due to a decrease in headcount following a reduction in force ("RIF") during the current quarter, combined with lower cost of part sales, maintenance costs, training costs and lease costs, were partially offset by higher fuel and freight costs.

General and administrative expenses were $3.1 million higher in the current quarter primarily due to incentive compensation expenses.

Merger-related costs of $16.5 million during the current quarter primarily consisted of RIF costs related to the Merger.

Restructuring costs of $7.9 million during the current quarter were primarily related to separation programs in our Africa and Asia Pacific regions and corporate, which were not directly related to the Merger.

During the current quarter, the Company recognized a loss on impairment of $1.2 million related to helicopters held for sale. During the preceding quarter, the Company recognized a loss on impairment of $51.9 million related to its investment in Cougar and a loss on impairment of $1.4 million related to helicopters held for sale.

During the current quarter, the Company disposed of five S-76C++ helicopters via sales-type lease agreements and disposed of three fixed wing aircraft for cash proceeds of $1.4 million, resulting in losses of $7.2 million. During the preceding quarter, the Company sold five S-76C++ medium, two B412 medium, seven B407 single engine helicopters, and one H225 simulator for cash proceeds of $14.4 million, resulting in gains of $2.0 million.

During the current quarter, in connection with the Refinancing, the Company repaid existing term loans and redeemed its 7.750% senior unsecured notes due December 15, 2022 (the "7.750% Senior Notes") and recognized a loss on extinguishment of debt of $28.5 million related to the write-off of associated discount balances and early repayment fees.

During the current quarter, the Company recognized an expense of $0.4 million related to bankruptcy trustee fees. During the preceding quarter, the Company recognized a gain of $2.0 million related to the release of the rabbi trust which held investments related to the Company's senior non-qualified deferred compensation plan for the Company's former senior executives.

Other income, net of $7.0 million in the current quarter was primarily due to government grants in Australia of $3.8 million, insurance proceeds of $2.6 million and a favorable interest adjustment to the Company's pension liability of $1.0 million, partially offset by net foreign exchange losses of $1.7 million. Other income, net of $5.9 million in the preceding quarter was primarily due to government grants in Australia of $3.4 million, a favorable interest adjustment to the Company's pension liability of $1.1 million and net foreign exchange gains of $0.9 million.

Income tax benefit was $19.1 million in the current quarter compared to income tax expense of $13.4 million in the preceding quarter. The expense in the preceding quarter primarily related to variability of earnings in different jurisdictions and the impact of valuation allowances.

Calendar Quarter Results

Operating revenues were $7.1 million higher in the current quarter compared to the three months ended March 31, 2020 (the "prior year quarter").

Operating revenues from oil and gas operations were $5.3 million lower in the current quarter. Operating revenues in the Africa region were $16.1 million lower primarily due to the end of customer contracts. Operating revenues in the Europe Caspian region were $11.0 million lower primarily due to fewer helicopters on contract, partially offset by the strengthening of the GBP and Norwegian krone ("NOK") relative to the U.S. dollar. These decreases were partially offset by increased operating revenues of $21.9 million in the Americas region primarily due to the impact of the Merger.

Operating revenues from U.K. SAR services were $5.5 million higher in the current quarter primarily due to the strengthening of the GBP relative to the U.S. dollar.

Operating revenues from fixed wing services were $2.7 million higher in the current quarter. Increased revenues in Australia of $5.0 million primarily due to strengthening of the AUD relative to the U.S. dollar and higher utilization were partially offset by decreased revenues of $2.3 million in other regions primarily due to lower utilization.

Operating revenues from other services were $4.2 million higher due to the benefit of the Merger and higher part sales.

Operating expenses were $6.5 million higher in the current quarter. Maintenance costs were $6.2 million higher primarily due to the impact of the Merger, partially offset by lower activity. Personnel costs were $2.3 million higher primarily due to the impact of the Merger, partially offset by headcount reductions. Insurance costs were $1.6 million higher. These increases were partially offset by decreased other operating costs of $3.6 million primarily due to lower activity and lower lease expense.

General and administrative expenses were $1.1 million higher in the current quarter primarily due to increased professional services fees.

Merger-related costs of $16.5 million during the current quarter primarily consisted of RIF costs related to the Merger.

Restructuring costs of $7.9 million during the current quarter were primarily related to separation programs in our Africa and Asia Pacific regions and corporate, which were not directly related to the Merger.

During the current quarter, the Company recognized a loss on impairment of $1.2 million related to helicopters held for sale. During the prior year quarter, the Company recognized a loss on impairment of $9.6 million related to its investment in Líder Táxi Aéreo S.A. ("Líder") in Brazil.

During the current quarter, the Company disposed of five S-76C++ helicopters via sales-type lease agreements and disposed of three fixed wing aircraft, resulting in losses of $7.2 million. During the prior year quarter, the Company disposed of four H225 heavy and one B412 medium helicopters for cash proceeds of $13.6 million, resulting in losses of $0.3 million.

During the current quarter, the Company recognized losses of $0.4 million from its equity investments compared to earnings of $5.8 million in the prior year quarter. The prior year quarter included earnings from Líder, which the Company has subsequently exited its equity investment, and from Cougar, which was impaired during the preceding quarter.

During the current quarter, in connection with the Refinancing, the Company repaid existing term loans and redeemed its 7.750% Senior Notes and recognized a loss on extinguishment of debt of $28.5 million related to the write-off of associated discount balances and early repayment fees.

During the current quarter, the Company recognized an expense of $0.4 million related to bankruptcy trustee fees. Reorganization items incurred in the prior year quarter consisted of $6.5 million related to professional services fees for fresh start accounting and $0.7 million related to bankruptcy trustee fees.

During the prior year quarter, the Company recognized a benefit of $317.5 million related to a decrease in the fair value of preferred stock derivative.

Other income, net of $7.0 million in the current quarter was primarily due to government grants in Australia of $3.8 million, insurance proceeds of $2.6 million and a favorable interest adjustment to the Company's pension liability of $1.0 million, partially offset by net foreign exchange losses of $1.7 million. Other expense, net of $13.7 million in the prior year quarter was primarily due to net foreign exchange losses of $14.8 million and a favorable interest adjustment to the Company's pension liability of $1.2 million.

Income tax benefit was $19.1 million in the current quarter compared to $11.1 million in the prior year quarter due to variability of earnings in different jurisdictions and the impact of valuation allowances.

Liquidity and Capital Allocation

As of March 31, 2021, the Company had $228.0 million of unrestricted cash and $56.1 million of remaining availability under its amended asset-based revolving credit facility (the "ABL Facility") for total liquidity of $284.1 million.

During the current quarter, the Company closed a private offering of $400 million aggregate principal amount of 6.875% senior secured notes due 2028 (the "6.875% Senior Notes"). The Company used a portion of the net proceeds from the offering of the 6.875% Senior Notes, together with cash on hand, to repay its secured equipment term loan with Macquarie Bank Limited, term loans with PK AirFinance S.à r.l. and to redeem its 7.750% Senior Notes.

In the current quarter, cash proceeds from dispositions of property and equipment were $1.4 million and purchases of property and equipment were $3.6 million, resulting in net (proceeds from)/purchases of property and equipment ("Net Capex") of $2.2 million. In the preceding quarter, cash proceeds from dispositions of property and equipment were $14.4 million and purchases of property and equipment were $3.9 million, resulting in Net Capex of $(10.5) million. See Adjusted Free Cash Flow Reconciliation for a reconciliation of Net Capex and Adjusted Free Cash Flow.

Conference Call

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Thursday, May 27, 2021, to review the results for the fiscal fourth quarter ended March 31, 2021. The conference call can be accessed as follows:

All callers will need to reference the access code 8912072

Within the U.S.: Operator Assisted Toll-Free Dial-In Number: (800) 353-6461

Outside the U.S.: Operator Assisted International Dial-In Number: (334) 323-0501

Replay

A telephone replay will be available through June 10, 2021 by dialing 888-203-1112 and utilizing the access code above. An audio replay will also be available on the Company's website at www.bristowgroup.com shortly after the call and will be accessible through June 10, 2021. The accompanying investor presentation will be available on May 27, 2021 on Bristow's website at www.bristowgroup.com.

For additional information concerning Bristow, contact Jennifer Whalen at (713) 369-4636 or visit Bristow Group's website at https://ir.bristowgroup.com/.

About Bristow Group

Bristow Group Inc. is the leading global provider of vertical flight solutions. Bristow primarily provides aviation services to a broad base of major integrated, national and independent offshore energy companies. Bristow provides commercial search and rescue ("SAR") services in several countries and public sector SAR services in the United Kingdom ("U.K.") on behalf of the Maritime & Coastguard Agency ("MCA"). Additionally, the Company offers ad hoc helicopter and fixed wing transportation services.

Bristow currently has customers in Australia, Brazil, Canada, Chile, Colombia, Guyana, India, Mexico, Nigeria, Norway, Spain, Suriname, Trinidad, the U.K. and the U.S.

Forward-Looking Statements Disclosure

This press release contains "forward-looking statements." Forward-looking statements represent Bristow Group Inc.'s (the "Company") current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "project," or "continue," or other similar words. These statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, reflect management's current views with respect to future events and therefore are subject to significant risks and uncertainties, both known and unknown. The Company's actual results may vary materially from those anticipated in forward-looking statements. The Company cautions investors not to place undue reliance on any forward-looking statements.

Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based that occur after the date hereof. Risks that may affect forward-looking statements include, but are not necessarily limited to, those relating to: the COVID-19 pandemic and related economic repercussions have resulted, and may continue to result, in a decrease in the price of and demand for oil, which has caused, and may continue to cause, a decrease in the demand for our services; expected cost synergies and other benefits of the merger (the "Merger") of the entity formerly known as Bristow Group Inc. ("Old Bristow") and Era Group Inc. ("Era") might not be realized within the expected time frames, might be less than projected or may not be realized at all; the ability to successfully integrate the operations, accounting and administrative functions of Era and Old Bristow; managing a significantly larger company than before the completion of the Merger; diversion of management time on issues related to integration of the companies; the increase in indebtedness as a result of the Merger; operating costs, customer loss and business disruption following the Merger, including, without limitation, difficulties in maintaining relationships with employees and customers, may be greater than expected; our reliance on a limited number of customers and the reduction of our customer base as a result of bankruptcies or consolidation; the possibility that we may be unable to maintain compliance with covenants in our financing agreements; fluctuations in worldwide prices of and demand for oil and natural gas; fluctuations in levels of oil and natural gas exploration, development and production activities; fluctuations in the demand for our services; the possibility that we may impair our long-lived assets, including goodwill, inventory, property and equipment and investments in unconsolidated affiliates; our ability to implement operational improvement efficiencies with the objective of rightsizing our global footprint and further reducing our cost structure; the possibility of significant changes in foreign exchange rates and controls, including as a result of the U.K. having exited from the European Union ("E.U.") ("Brexit"); the impact of continued uncertainty surrounding the effects Brexit will have on the British, E.U. and global economies and demand for oil and natural gas; potential effects of increased competition; the risk of future material weaknesses we may identify while we work to align policies, principles, and practices of the combined company following the Merger or any other failure by us to maintain effective internal controls; the possibility that we may be unable to re-deploy our aircraft to regions with greater demand; the possibility of changes in tax and other laws and regulations, and policies, including, without limitation, actions of the Biden Administration that impact oil and gas operations or favor renewable energy projects in the U.S.; the possibility that we may be unable to dispose of older aircraft through sales into the aftermarket; general economic conditions, including the capital and credit markets; the possibility that segments of our fleet may be grounded for extended periods of time or indefinitely; the existence of operating risks inherent in our business, including the possibility of declining safety performance; the possibility of political instability, war or acts of terrorism in any of the countries where we operate; the possibility that reductions in spending on aviation services by governmental agencies could lead to modifications of our search and rescue ("SAR") contract terms with the U.K. government, our contracts with the Bureau of Safety and Environmental Enforcement ("BSEE") or delays in receiving payments under such contracts; and our reliance on a limited number of helicopter manufacturers and suppliers. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. We have included important factors in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021, which we believe over time, could cause our actual results, performance or achievements to differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements. You should consider all risks and uncertainties disclosed in the Proxy Statement and in our filings with the United States Securities and Exchange Commission (the "SEC"), all of which are accessible on the SEC's website at www.sec.gov.

Reconciliation of Non-GAAP Metrics

The Company's management uses EBITDA and Adjusted EBITDA to assess the performance and operating results of its business. EBITDA is defined as Earnings before Interest expense, Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for certain special items that occurred during the reported period, as noted below. The Company includes EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of its operating performance. Neither EBITDA nor Adjusted EBITDA is a recognized term under generally accepted accounting principles in the U.S. ("GAAP"). Accordingly, they should not be used as an indicator of, or an alternative to, net income as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management's discretionary use, as they do not consider certain cash requirements, such as debt service requirements. Because the definitions of EBITDA and Adjusted EBITDA (or similar measures) may vary among companies and industries, they may not be comparable to other similarly titled measures used by other companies.

The following tables provide a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands).

Reconciliation of Non-GAAP Metrics

The following tables provide a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands).

Pro Forma Q4 FY20 Reconciliation

Pro Forma EBITDA and Pro Forma Adjusted EBITDA reflect EBITDA and Adjusted EBITDA of Old Bristow and Era Group Inc. before the Merger. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Pro Forma EBITDA and Pro Forma Adjusted EBITDA for the three months ended March 31, 2020 (in thousands).

Pro Forma LTM Reconciliation

Pro Forma EBITDA and Pro Forma Adjusted EBITDA reflect EBITDA and Adjusted EBITDA of Old Bristow and Era Group Inc. before the Merger for the period beginning April 1, 2020 through June 11, 2020, plus EBITDA and Adjusted EBITDA for the post-Merger period through March 31, 2021. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Pro Forma EBITDA and Pro Forma Adjusted EBITDA for the twelve months ended March 31, 2021 (in thousands).

Adjusted Free Cash Flow Reconciliation

Free Cash Flow represents the Company's net cash provided by operating activities plus proceeds from disposition of property and equipment, less expenditures related to purchases of property and equipment. Adjusted Free Cash Flow is Free Cash Flow adjusted to exclude professional services fees and other costs paid in relation to the Merger, fresh-start accounting and the Chapter 11 Cases. Management believes that the use of Adjusted Free Cash Flow is meaningful as it measures the Company's ability to generate cash from its business after excluding cash payments for special items. Management uses this information as an analytical indicator to assess the Company's liquidity and performance. However, investors should note numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate Adjusted Free Cash Flow may differ from the methods used by other companies to calculate their free cash flow.

The following table provides a reconciliation of net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow and Adjusted Free Cash Flow (in thousands).

The chart below presents the number of aircraft in our fleet and their distribution among the regions in which we operate as of March 31, 2021 and the percentage of operating revenue that each of our regions provided during the current quarter.

SOURCE Bristow Group

Related Links

http://www.bristowgroup.com