(Bristow, 2.Aug.2023) — Bristow Group Inc. (NYSE: VTOL) reported net loss attributable to the company of $1.6mn, or $0.06 per diluted share, for its quarter ended June 30, 2023 (the “Current Quarter”) on operating revenues of $311.5mn compared to net loss attributable to the company of $1.5mn, or $0.05 per diluted share, for the quarter ended 31 March 2023 (the “Preceding Quarter”) on operating revenues of $292.9mn.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $12.3mn in the Current Quarter compared to $21.1mn in the Preceding Quarter. EBITDA adjusted to exclude special items, gains or losses on asset dispositions and foreign exchange losses was $39mn in the Current Quarter compared to $28.9 million in the Preceding Quarter. The following table provides a reconciliation of net loss to EBITDA, Adjusted EBITDA and Adjusted EBITDA excluding gains or losses on asset dispositions and foreign exchange losses (in thousands, unaudited). See “Non-GAAP Financial Measures” for further information on the use of non-GAAP financial measures used herein.
|Three Months Ended,|
|30 June 2023||31 March 2023|
|Depreciation and amortization expense||18,292||17,445|
|Interest expense, net||9,871||10,264|
|Income tax benefit||(14,209)||(5,094)|
|Merger and integration costs||677||439|
|Reorganization items, net||39||44|
|Non-cash insurance adjustment||3,977||—|
|Other special items(1)||2,097||2,700|
|(Gains) losses on disposal of assets||3,164||(3,256)|
|Foreign exchange losses||13,021||4,103|
|Adjusted EBITDA excluding asset dispositions and foreign exchange||$38,989||$28,923|
|(1) Other special items include professional services fees that are not related to continuing business operations and other nonrecurring costs.|
“The 35% sequential quarter improvement in Adjusted EBITDA, excluding asset dispositions and foreign exchange losses, is evidence of the building momentum for Bristow’s business in 2023,” said Chris Bradshaw, President and CEO of Bristow Group. “We continue to believe the company’s financial performance in the second half of the year will be significantly higher than the first half of this year, setting up positively for stronger financial results in 2024, as highlighted by our recently issued Adjusted EBITDA guidance of $190mn – $220mn for next year.”
Sequential Quarter Results
Operating revenues in the Current Quarter were $18.6mn higher compared to the Preceding Quarter. Operating revenues from offshore energy services were $13.6mn higher primarily due to higher utilization and higher lease payments received from Cougar Helicopters Inc. Operating revenues from government services were $5mn higher in the Current Quarter primarily due to the strengthening of the British pound sterling (“GBP”) relative to the U.S. dollar (“USD”) and higher utilization. Operating revenues from fixed wing services were $0.5mn higher in the Current Quarter primarily due to higher utilization. Operating revenues from other services were $0.5mn lower in the Current Quarter primarily due to lower dry-lease revenues.
Operating expenses were $13.9mn higher in the Current Quarter primarily due to higher repairs and maintenance costs, other operating costs, and a non-cash, nonrecurring write-off related to amounts from legacy insurance policies, partially offset by lower fuel costs.
General and administrative expenses were $2.1mn lower primarily due to lower professional services fees.
During the Current Quarter, the company sold or otherwise disposed of three helicopters and other assets, resulting in a net loss of $3.2mn. During the Preceding Quarter, the company sold or otherwise disposed of three helicopters and other assets, resulting in a net gain of $3.3mn.
Other expense, net of $13mn in the Current Quarter primarily resulted from foreign exchange losses of $13mn. Other expense, net of $3.4mn in the Preceding Quarter primarily resulted from foreign exchange losses of $4.1mn, partially offset by a favorable interest adjustment to the Company’s pension liability.
Income tax benefit was $9.1mn higher in the Current Quarter primarily due to the earnings mix of the company’s global operations and changes to deferred tax valuation allowances and assets.
Liquidity and Capital Allocation
As of June 30, 2023, the company had $212mn of unrestricted cash and $73.3mn of remaining availability under its amended asset-based revolving credit facility (the “ABL Facility”) for total liquidity of $285.3mn. Borrowings under the amended ABL Facility are subject to certain conditions and requirements.
In the Current Quarter, purchases of property and equipment were $12.2mn, of which $2.5mn were maintenance capital expenditures, and cash proceeds from dispositions of property and equipment were $3.3mn. In the Preceding Quarter, purchases of property and equipment were $31.5mn, of which $3mn were maintenance capital expenditures, and cash proceeds from dispositions of property and equipment were $23.4mn. See Adjusted Free Cash Flow Reconciliation for a reconciliation of Adjusted Free Cash Flow.
2023 Outlook (Affirmed) and Recently Issued 2024 Outlook
Please refer to the paragraph entitled “Forward Looking Statements Disclosure” below for further discussion regarding the risks and uncertainties as well as other important information regarding Bristow’s guidance. The following guidance also contains the non-GAAP financial measure of Adjusted EBITDA.
Select financial targets for the calendar years 2023 and 2024 are as follows (in USD, millions):
|Offshore energy services||$755 – $830||$850 – $970|
|Government services||$340 – $355||$340 – $365|
|Fixed wing services||$95 – $110||$95 – $115|
|Other services||$10 – $15||$10 – $15|
|Total operating revenues||$1,200 – $1,310||$1,295 – $1,465|
|Adjusted EBITDA(1), excluding asset dispositions and foreign exchange losses|
|$150 – $170||$190 – $220|
|Cash taxes||$20 – $25||$20 – $25|
|Maintenance capital expenditures||$20 – $25||$15 – $20|
|(1) The average GBP/USD exchange rate assumptions used for 2023 and 2024 financial outlook were 1.26 and 1.27, respectively. For illustrative purposes, each £0.01 movement in the GBP/USD exchange rate would impact Adjusted EBITDA by approximately +/-$1.5mn.|