Exhibit 99.1
bristowlogoa15.jpg
News Release


FOR IMMEDIATE RELEASE

Bristow Group Reports Fiscal Fourth Quarter and Full Fiscal Year 2018 Results

HOUSTON, May 23, 2018 – Bristow Group Inc. (NYSE: BRS) today reported the following results for the fourth quarter and full fiscal year ended March 31, 2018. All amounts shown are dollar amounts in thousands unless otherwise noted:
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
Operating revenue
 
$
341,175

 
$
323,651

 
5.4
 %
 
$
1,384,424

 
$
1,347,850

 
2.7
 %
Net loss attributable to Bristow Group
 
(100,901
)
 
(78,040
)
 
(29.3
)%
 
(195,658
)
 
(170,536
)
 
(14.7
)%
Diluted loss per share
 
(2.84
)
 
(2.22
)
 
(27.9
)%
 
(5.54
)
 
(4.87
)
 
(13.8
)%
Adjusted EBITDA (1)
 
22,882

 
3,687

 
*

 
105,427

 
71,084

 
48.3
 %
Adjusted net loss (1)
 
(17,038
)
 
(40,302
)
 
57.7
 %
 
(75,007
)
 
(74,525
)
 
(0.6
)%
Adjusted diluted loss per share (1)
 
(0.48
)
 
(1.15
)
 
58.3
 %
 
(2.13
)
 
(2.13
)
 
 %
Operating cash flow
 
(10,237
)
 
25,635

 
*

 
(19,544
)
 
11,537

 
*

Capital expenditures
 
9,846

 
15,384

 
(36.0
)%
 
46,287

 
135,110

 
(65.7
)%
Rent expense
 
50,172

 
55,718

 
(10.0
)%
 
208,691

 
212,608

 
(1.8
)%
 
 
March 31,
 
December 31,
 
March 31,
 
% Change
 
% Change
 
 
2018
 
2017
 
2017
 
Quarter over quarter
 
Year over year
Cash
 
$
380,223

 
$
117,848

 
$
96,656

 


 


Undrawn borrowing capacity on Revolving Credit Facility (2)
 

 
387,584

 
260,320

 


 


Total liquidity
 
$
380,223

 
$
505,432

 
$
356,976

 
(24.8
)%
 
6.5
%
______________ 
*
percentage change too large to be meaningful or not applicable
(1) 
A full reconciliation of non-GAAP financial measures is included at the end of this news release.
(2) 
The Revolving Credit Facility was terminated on March 6, 2018. Our new $75 million Asset-Backed Revolving Credit Facility closed on April 17, 2018 and, therefore, availability under such facility is not included in liquidity as of March 31, 2018.
“The New Bristow was successful in executing our fiscal 2018 STRIVE priorities, including agreements to recover $136 million in OEM costs, reducing rent expense by returning aircraft to lessors, deferring approximately $190 million of capital expenditures, and increasing financial flexibility by completing over $700 million in new low cost financings,” said Jonathan Baliff, President and Chief Executive Officer of Bristow Group. “Our fourth quarter results reflect our global team’s delivery of world-class safety performance during very challenging times and the benefit of increased short-cycle offshore activity which continued to drive higher than expected adjusted EBITDA across all regions for fiscal 2018.”
BUSINESS AND FINANCIAL HIGHLIGHTS
Net loss was $100.9 million ($2.84 per diluted share) for the March 2018 quarter compared to a net loss of $78.0 million ($2.22 per diluted share) for the March 2017 quarter.


1

        

Adjusted net loss was $17.0 million ($0.48 per diluted share) for the March 2018 quarter compared to an adjusted net loss of $40.3 million ($1.15 per diluted share) for the March 2017 quarter; the March 2018 quarter is adjusted for $83.9 million in net unfavorable special items, including impairment of our investment in Líder in Brazil, and the March 2017 quarter is adjusted for $37.7 million in net unfavorable special items.
Fiscal year 2018 adjusted EBITDA of $105.4 million was up 48% over fiscal year 2017 adjusted EBITDA and in-line with increased adjusted EBITDA guidance provided in February 2018.
Cash increase of $262 million in the March 2018 quarter to $380 million reflects the net benefit of the funding of our $350 million 8.75% five-year Senior Secured Notes, the termination of our Revolving Credit Facility and term loan repayments of $52.6 million.
We expect fiscal year 2019 adjusted EBITDA to be in the range of $90 million to $140 million.
“I am honored to work with a team that delivered notable successes for our clients and investors in fiscal 2018, especially in the areas of safety on the field and liquidity on the balance sheet,” said Jonathan Baliff. “Looking ahead, our fiscal 2019 priorities will focus on continued safety improvement, delivering world-class performance to our clients and proactively managing our cost structure across a more responsive, regionally-focused New Bristow, while we win more business in this short-cycle challenging market.”
Operating revenue from external clients by line of service was as follows:
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Oil and gas services
 
$
232,278

 
$
233,753

 
(0.6
)%
 
$
947,462

 
$
956,649

 
(1.0
)%
U.K. SAR services
 
58,659

 
43,963

 
33.4
 %
 
222,965

 
189,555

 
17.6
 %
Fixed wing services
 
49,845

 
43,498

 
14.6
 %
 
209,719

 
191,609

 
9.5
 %
Corporate and other
 
393

 
2,437

 
(83.9
)%
 
4,278

 
10,037

 
(57.4
)%
Total operating revenue
 
$
341,175

 
$
323,651

 
5.4
 %
 
$
1,384,424

 
$
1,347,850

 
2.7
 %
FOURTH QUARTER FY2018 RESULTS
The year-over-year increase in revenue was primarily driven by the increase in U.K. SAR services due to additional bases coming online and an increase from our fixed wing services in our Europe Caspian, Asia Pacific and Africa regions. These revenue increases were partially offset by a decrease in our oil and gas services driven by declines in our Asia Pacific and Africa regions, while revenue from oil and gas services in our Americas and Europe Caspian regions improved.
We reported a net loss of $100.9 million and diluted loss per share of $2.84 for the March 2018 quarter compared to a net loss of $78.0 million and diluted loss per share of $2.22 for the March 2017 quarter. The year-over-year change in net loss and diluted loss per share was primarily due to a loss on impairment in the March 2018 quarter and higher interest expense resulting from additional borrowings, partially offset by the increase in revenue discussed above and an income tax benefit.
The net loss for the March 2018 quarter was significantly impacted by the following special items:
Loss on impairment totaling $90.2 million ($62.4 million net of tax including an additional $31.2 million in tax resulting from the repositioning of certain aircraft from one tax jurisdiction to another related to recent financing transactions), or $1.76 per share, including:
Impairment of investment in unconsolidated affiliates of $85.7 million related to impairment of our investment in Líder in Brazil, and
Impairment on inventories of $4.5 million;
Organizational restructuring costs of $8.5 million ($6.0 million net of tax), or $0.17 per share, all of which is severance expense; $6.4 million of the restructuring costs are included in direct costs and $2.1 million are included in general and administrative expense;

2

        


Early extinguishment of debt of $1.9 million ($1.3 million net of tax), or $0.04 per share, included in interest expense, which includes $1.8 million related to write-off of deferred financing fees and $0.1 million related to write-off of discount on debt; and
Loss on disposal of assets of $5.2 million ($40.1 million net of tax), or $1.13 per share; partially offset by
A non-cash benefit from tax items of $25.8 million, or $0.73 per share, that includes a one-time non-cash tax effect from the true-up of the one-time transition tax on the repatriation of foreign earnings under the Tax Cuts and Jobs Act (the “Act”) of $31.2 million and net reversal of valuation allowances on deferred tax assets of $17.3 million, partially offset by a $22.7 million expense related to the true-up of the revaluation of net deferred tax liabilities to a lower tax rate resulting from the Act.
Excluding these items, adjusted net loss and adjusted diluted loss per share improved to $17.0 million and $0.48, respectively, for the March 2018 quarter compared to $40.3 million and $1.15, respectively, for the March 2017 quarter. Adjusted EBITDA also improved year-over-year to $22.9 million in the March 2018 quarter from $3.7 million in the March 2017 quarter primarily due an increase in operating revenue in our Europe Caspian region, primarily due to additional bases coming online for U.K. SAR, and increased activity and in our Americas region, primarily due to increased activity in the U.S. Gulf of Mexico.
LIQUIDITY AND FINANCIAL FLEXIBILITY
Our cash balance of $380 million as of March 31, 2018 reflects the net benefit from closing and funding the $350 million 8.75% five-year Senior Secured Notes and the repayment of our April 2019 bank maturities.

Don Miller, Senior Vice President and Chief Financial Officer, commented, “Fiscal year 2018 was a very successful year for Bristow as we materially improved our liquidity runway by repaying our 2019 bank maturities with the closing and funding of over $700 million in new low cost capital eliminating near term refinancing risk. The success of these financings will allow us to continue to focus on increasing revenue, reducing costs, and improving returns on our assets.”
REGIONAL PERFORMANCE
Europe Caspian
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
194,429

 
$
162,511

 
19.6
 %
 
$
765,412

 
$
710,581

 
7.7
 %
Operating income (loss)
 
$
3,164

 
(4,628
)
 
*

 
$
22,774

 
13,840

 
64.6
 %
Operating margin
 
1.6
%
 
(2.8
)%
 
*

 
3.0
%
 
1.9
%
 
57.9
 %
Adjusted EBITDA
 
$
22,787

 
$
1,890

 
*

 
$
81,503

 
$
45,163

 
80.5
 %
Adjusted EBITDA margin
 
11.7
%
 
1.2
 %
 
*

 
10.6
%
 
6.4
%
 
65.6
 %
Rent expense
 
$
31,355

 
$
34,065

 
(8.0
)%
 
$
134,158

 
$
134,072

 
0.1
 %
Loss on impairment
 
$
4,525

 
$

 
*

 
$
4,525

 
$
8,706

 
(48.0
)%
_______________
*
percentage change too large to be meaningful or not applicable
The increase in operating revenue for the March 2018 quarter and fiscal year 2018 primarily resulted from an increase in activity and short-term contracts in Norway, the start-up of U.K. SAR bases and an increase in fixed wing revenue. Partially offsetting these increases was a decrease in U.K. oil and gas revenue resulting from the continued impact of the industry downturn on exploration activity. Eastern Airways contributed $30.7 million and $24.5 million in operating revenue for the March 2018 and 2017 quarters, respectively, and $118.5 million and $110.4 million in operating revenue for fiscal years 2018 and 2017, respectively.
During the March 2018 quarter and fiscal year 2018, our results for the Europe Caspian region were impacted by a reduction in rent expense of $2.8 million and $9.9 million, respectively, related to OEM cost recoveries that increased operating income and adjusted EBITDA.

3

        

During the March 2018 quarter and fiscal year 2018, we recorded an inventory impairment charge of $4.5 million for our fixed wing operations at Eastern Airways as a result of changes in expected future utilization of aircraft within those operations. During fiscal year 2017, we recorded an impairment charge of $8.7 million of goodwill related to Eastern Airways. Both the inventory and goodwill impairment charges were included in operating income, but were adjusted for in our calculation of adjusted EBITDA.
A substantial portion of our revenue in the Europe Caspian region is contracted in British pound sterling, which depreciated significantly against the U.S. dollar in fiscal year 2017 due to Brexit with a modest recovery in fiscal year 2018. As a result of the changes in the British pound sterling, adjusted EBITDA was favorably impacted by foreign currency exchange rate changes of $4.3 million and $9.2 million, respectively, during the March 2018 quarter and fiscal year 2018 compared to an unfavorable impact of $6.3 million and $35.6 million, respectively, during the March 2017 quarter and fiscal year 2017.
Operating income, operating margin, adjusted EBITDA and adjusted EBITDA margin increased in the March 2018 quarter and fiscal year 2018 primarily due to the increase in operating revenue, the reduction in rent expense related to the OEM cost recoveries and favorable impacts from changes in foreign currency exchange rates. These benefits were partially offset by increased salaries and benefits and maintenance expense year-over-year due to the increase in activity. Eastern Airways generated a negative $3.3 million and negative $4.3 million in adjusted EBITDA for the March 2018 and 2017 quarters, respectively, and a negative $6.9 million and negative $4.5 million in adjusted EBITDA for fiscal years 2018 and 2017, respectively.
Africa
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
45,307

 
$
47,049

 
(3.7
)%
 
$
191,830

 
$
200,104

 
(4.1
)%
Earnings from unconsolidated affiliates
 
$
2,518

 
$
2,025

 
24.3
 %
 
$
2,518

 
$
2,068

 
21.8
 %
Operating income
 
$
3,973

 
$
10,225

 
(61.1
)%
 
$
32,326

 
$
30,179

 
7.1
 %
Operating margin
 
8.8
%
 
21.7
%
 
(59.4
)%
 
16.9
%
 
15.1
%
 
11.9
 %
Adjusted EBITDA
 
$
12,213

 
$
12,203

 
0.1
 %
 
$
52,419

 
$
51,553

 
1.7
 %
Adjusted EBITDA margin
 
27.0
%
 
25.9
%
 
4.2
 %
 
27.3
%
 
25.8
%
 
5.8
 %
Rent expense
 
$
2,133

 
$
2,000

 
6.7
 %
 
$
8,557

 
$
8,101

 
5.6
 %
The decrease in operating revenue for the March 2018 quarter and fiscal year 2018 primarily resulted from an overall decrease in activity compared to the prior year periods. Activity declined with certain clients and certain contracts ended, partially offset by an increase in activity from other clients. Additionally, fixed wing services in Africa generated operating revenue of $1.9 million and $1.8 million, respectively, for the March 2018 and 2017 quarters and $7.4 million and $4.2 million, respectively, for fiscal years 2018 and 2017.
Operating income and operating margin decreased in the March 2018 quarter primarily due to employee severance costs resulting from the expiration of a significant contract in this region which was not renewed. Operating income and operating margin increased in fiscal year 2018 primarily due to a decrease in depreciation and amortization expense and lower operating expenses. Adjusted EBITDA increased in the March 2018 quarter and fiscal year 2018 compared to prior comparative periods primarily due to a favorable exchange rate impact compared to fiscal year 2017.
On March 31, 2018, a significant contract in this region expired and was not renewed. Additionally, changing regulations and political environment have made, and are expected to continue to make, our operating results for Nigeria unpredictable. Market uncertainty related to the oil and gas downturn has continued in this region, putting smaller clients under increasing pressure as their activity declined, which has reduced our activity levels and overall pricing.

4

        

Americas
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
57,480

 
$
51,966

 
10.6
 %
 
$
236,364

 
$
220,544

 
7.2
 %
Earnings from unconsolidated affiliates
 
$
590

 
$
253

 
133.2
 %
 
$
4,302

 
$
5,207

 
(17.4
)%
Operating income (loss)
 
$
(84,592
)
 
$
(1,566
)
 
*

 
$
(73,057
)
 
$
4,224

 
*

Operating margin
 
(147.2
)%
 
(3.0
)%
 
*

 
(30.9
)%
 
1.9
%
 
*

Adjusted EBITDA
 
$
7,580

 
$
5,635

 
34.5
 %
 
$
41,010

 
$
39,952

 
2.6
 %
Adjusted EBITDA margin
 
13.2
 %
 
10.8
 %
 
22.2
 %
 
17.4
 %
 
18.1
%
 
(3.9
)%
Rent expense
 
$
6,440

 
$
6,757

 
(4.7
)%
 
$
24,920

 
$
23,015

 
8.3
 %
Loss on impairment
 
$
85,683

 
$

 
*

 
$
85,683

 
$

 
*

_______________
*
percentage change too large to be meaningful or not applicable
Operating revenue increased for the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due an increase in activity from our U.S. Gulf of Mexico operations and additional revenue from the search and rescue consortium in the U.S. Gulf of Mexico.
Earnings from unconsolidated affiliates, net of losses, decreased for fiscal year 2018 compared to fiscal year 2017 primarily due to a decrease in earnings from our investment in Líder in Brazil due to reduction in activity, partially offset by less of an unfavorable change in exchange rates. Changes in foreign currency exchange rates decreased our earnings from our investment in Líder by $0.3 million, $0.6 million, $2.0 million and $3.2 million in the March 2018 quarter, March 2017 quarter, fiscal year 2018 and fiscal year 2017, respectively.
Líder’s management has significantly decreased their future financial projections as a result of recent tender awards announced by Petrobras. Petrobras represented 64% and 66% of Líder’s operating revenue in calendar years 2017 and 2016, respectively. This significant decline in future forecasted results, coupled with previous declining financial results, triggered our review of the investment for potential impairment as of March 31, 2018. Based on the estimated fair value, we recorded an $85.7 million impairment in the March 2018 quarter. Our remaining investment in Líder as of March 31, 2018 is $62.3 million.
The decreases in operating income (loss) and operating margin for the March 2018 quarter and fiscal year 2018 is primarily due to the impairment of our investment in Líder discussed above. The increases in adjusted EBITDA and adjusted EBITDA margin for the March 2018 quarter and fiscal year 2018 were primarily driven by the increase in revenue discussed above.
Asia Pacific
    
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
47,825

 
$
62,628

 
(23.6
)%
 
$
201,190

 
$
217,772

 
(7.6
)%
Operating income (loss)
 
$
(4,916
)
 
$
3,610

 
*

 
$
(24,290
)
 
$
(20,870
)
 
(16.4
)%
Operating margin
 
(10.3
)%
 
5.8
%
 
*

 
(12.1
)%
 
(9.6
)%
 
(26.0
)%
Adjusted EBITDA
 
$
(1,926
)
 
$
5,487

 
*

 
$
(1,424
)
 
$
(5,026
)
 
71.7
 %
Adjusted EBITDA margin
 
(4.0
)%
 
8.8
%
 
*

 
(0.7
)%
 
(2.3
)%
 
69.6
 %
Rent expense
 
$
8,552

 
$
10,956

 
(21.9
)%
 
$
32,908

 
$
39,759

 
(17.2
)%
Operating revenue decreased in the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due to the early cancellation of a contract that generated an additional $17.2 million of operating revenue in the March 2017 quarter.

5

        

Airnorth contributed $17.2 million in operating revenue for both the March 2018 and 2017 quarters, and a negative $1.4 million and a negative $0.7 million in adjusted EBITDA for the March 2018 and 2017 quarters, respectively, and $83.8 million and $77.1 million in operating revenue and $7.2 million and $7.1 million in adjusted EBITDA for fiscal years 2018 and 2017, respectively.
Operating income (loss), operating margin, adjusted EBITDA and adjusted EBITDA margin declined for the March 2018 quarter and fiscal year 2018 compared to the prior year periods primarily due to the contract cancellation discussed above, which contributed $11.1 million of operating income and adjusted EBITDA in the March 2017 quarter, and a decline in oil and gas revenue, which was only partially offset by cost reduction efforts.
Corporate and other
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
% Change
 
FY2018
 
FY2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except percentages)
Operating revenue
 
$
393

 
$
2,452

 
(84.0
)%
 
$
4,305

 
$
10,369

 
(58.5
)%
Operating loss
 
$
(20,287
)
 
$
(25,747
)
 
21.2
 %
 
$
(88,996
)
 
$
(104,616
)
 
14.9
 %
Adjusted EBITDA
 
$
(17,772
)
 
$
(21,528
)
 
17.4
 %
 
$
(68,081
)
 
$
(60,558
)
 
(12.4
)%
Rent expense
 
$
1,692

 
$
1,940

 
(12.8
)%
 
$
8,148

 
$
7,661

 
6.4
 %
Loss on impairment
 
$

 
$

 
*

 
$
1,192

 
$
7,572

 
(84.3
)%
_______________
*
percentage change too large to be meaningful or not applicable
Operating revenue decreased in the March 2018 quarter and fiscal year 2018 compared to prior periods primarily due to the sale of Bristow Academy on November 1, 2017.
Operating loss and adjusted EBITDA improved for the March 2018 quarter compared to the March 2017 quarter primarily due to a reduction in general and administrative expenses, partially offset by the decline in revenue discussed above. Operating loss for fiscal years 2018 and 2017 was most significantly impacted by $1.2 million and $7.6 million, respectively, of inventory impairment charges and a reduction in general and administrative expenses, partially offset by the decline in revenue. Adjusted EBITDA decreased year-over-year primarily due to foreign currency transaction losses of $4.4 million for fiscal year 2018 versus foreign currency transaction gains of $14.5 million for fiscal year 2017. This change in foreign currency impacts was partially offset by overall cost reduction activities that decreased general and administrative expenses as discussed above.
During fiscal years 2018 and 2017, we recorded $9.5 million and $10.9 million, respectively, related to organizational restructuring costs, which along with the inventory impairment charges discussed above, are excluded from adjusted EBITDA.
FY 2019 GUIDANCE
Guidance for selected financial measures is included in the tables that follow.
CONFERENCE CALL
Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Thursday, May 24, 2018 to review financial results for the fiscal year 2018 fourth quarter and year ended March 31, 2018. This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com. The conference call can be accessed as follows:
Via Webcast:
Visit Bristow Group’s investor relations Web page at www.bristowgroup.com
Live: Click on the link for “Bristow Group Fiscal 2018 Fourth Quarter Earnings Conference Call”
Replay: A replay via webcast will be available approximately one hour after the call’s completion and will be accessible for approximately 90 days.

6

        

Via Telephone within the U.S.:
Live: Dial toll free 1-877-404-9648
Via Telephone outside the U.S.:
Live: Dial 1-412-902-0030
ABOUT BRISTOW GROUP INC.
Bristow Group Inc. is the leading global industrial aviation services provider offering helicopter transportation, search and rescue (SAR) and aircraft support services, including maintenance, to government and civil organizations worldwide. Bristow has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Russia and Trinidad. Bristow provides SAR services to the private sector worldwide and to the public sector for all of the U.K. on behalf of the Maritime and Coastguard Agency. For more information, visit bristowgroup.com.
FORWARD-LOOKING STATEMENTS DISCLOSURE
Statements contained in this news release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance, expected contract revenue, capital deployment strategy, operational and capital performance, expected cost management activities, expected capital expenditure deferrals, shareholder return, liquidity and market and industry conditions. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Risks and uncertainties include without limitation: fluctuations in the demand for our services; fluctuations in worldwide prices of and supply and demand for oil and natural gas; fluctuations in levels of oil and natural gas production, exploration and development activities; the impact of competition; actions by clients and suppliers; the risk of reductions in spending on industrial aviation services by governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange rates and controls; risks associated with international operations; operating risks inherent in our business, including the possibility of declining safety performance; general economic conditions including the capital and credit markets; our ability to obtain financing; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our ability to re-deploy our aircraft to regions with greater demand; our ability to acquire additional aircraft and dispose of older aircraft through sales into the aftermarket; the possibility that we do not achieve the anticipated benefit of our fleet investment program; availability of employees; and political instability, war or acts of terrorism in any of the countries where we operate. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s quarterly report on Form 10-Q for the quarter ended December 31, 2017 and annual report on Form 10-K for the fiscal year ended March 31, 2017. Bristow Group Inc. disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.
(financial tables follow)

Investor Relations
Linda McNeill
Director, Investor Relations
+1 713.267.7622

Global Media Relations
Adam Morgan
Director, Global Communications
+1 281.253.9005





7

        

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and percentages)
(Unaudited)

 
Fourth Quarter
 
Full Year
 
FY2018
 
FY2017
 
FY2018
 
FY2017
 
 
 
 
 
 
 
 
Gross revenue:
 
 
 
 
 
 
 
Operating revenue from non-affiliates
$
325,640

 
$
306,595

 
$
1,317,295

 
$
1,276,374

Operating revenue from affiliates
15,535

 
17,056

 
67,129

 
71,476

Reimbursable revenue from non-affiliates
17,267

 
12,543

 
60,538

 
52,652

 
358,442

 
336,194

 
1,444,962

 
1,400,502

 
 
 
 
 
 
 
 
Operating expense:
 
 
 
 
 
 
 
Direct cost
281,040

 
272,468

 
1,123,168

 
1,103,984

Reimbursable expense
16,981

 
12,217

 
59,346

 
50,313

Depreciation and amortization
29,923

 
25,694

 
124,042

 
118,748

General and administrative
46,292

 
46,089

 
184,987

 
195,367

 
374,236

 
356,468

 
1,491,543

 
1,468,412

 
 
 
 
 
 
 
 
Loss on impairment
(90,208
)
 

 
(91,400
)
 
(16,278
)
Loss on disposal of assets
(5,177
)
 
(1,422
)
 
(17,595
)
 
(14,499
)
Earnings from unconsolidated affiliates, net of losses
3,344

 
2,168

 
6,738

 
6,945

 
 
 
 
 
 
 
 
Operating loss
(107,835
)
 
(19,528
)
 
(148,838
)
 
(91,742
)
Interest expense, net
(23,383
)
 
(15,386
)
 
(77,060
)
 
(49,919
)
Other income (expense), net
(3,223
)
 
(1,123
)
 
(3,076
)
 
(2,641
)
Loss before benefit (provision) for income taxes
(134,441
)
 
(36,037
)
 
(228,974
)
 
(144,302
)
Benefit (provision) for income taxes
33,437

 
(43,626
)
 
30,891

 
(32,588
)
Net loss
(101,004
)
 
(79,663
)
 
(198,083
)
 
(176,890
)
Net loss attributable to noncontrolling interests
103

 
1,623

 
2,425

 
6,354

Net loss attributable to Bristow Group
$
(100,901
)
 
$
(78,040
)
 
$
(195,658
)
 
$
(170,536
)
 
 
 
 
 
 
 
 
Loss per common share:
 
 
 
 
 
 
 
Basic
$
(2.84
)
 
$
(2.22
)
 
$
(5.54
)
 
$
(4.87
)
Diluted
$
(2.84
)
 
$
(2.22
)
 
$
(5.54
)
 
$
(4.87
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP measures:
 
 
 
 
 
 
 
Adjusted EBITDA
$
22,882

 
$
3,687

 
$
105,427

 
$
71,084

Adjusted EBITDA margin
6.7
%
 
1.1
%
 
7.6
%
 
5.3
%
Adjusted net loss
$
(17,038
)
 
$
(40,302
)
 
$
(75,007
)
 
$
(74,525
)
Adjusted diluted loss per share
$
(0.48
)
 
$
(1.15
)
 
$
(2.13
)
 
$
(2.13
)


8

        

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
March 31,
 
2018
 
2017
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
380,223

 
$
96,656

Accounts receivable from non-affiliates
233,386

 
198,129

Accounts receivable from affiliates
13,594

 
8,786

Inventories
129,614

 
124,911

Assets held for sale
30,348

 
38,246

Prepaid expenses and other current assets
47,234

 
41,143

Total current assets
834,399

 
507,871

Investment in unconsolidated affiliates
126,170

 
210,162

Property and equipment – at cost:
 
 
 
Land and buildings
250,040

 
231,448

Aircraft and equipment
2,511,131

 
2,622,701

 
2,761,171

 
2,854,149

Less – Accumulated depreciation and amortization
(693,151
)
 
(599,785
)
 
2,068,020

 
2,254,364

Goodwill
19,907

 
19,798

Other assets
116,506

 
121,652

Total assets
$
3,165,002

 
$
3,113,847

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
 
 
 
Accounts payable
$
101,270

 
$
98,215

Accrued wages, benefits and related taxes
62,385

 
59,077

Income taxes payable
8,453

 
15,145

Other accrued taxes
7,378

 
9,611

Deferred revenue
15,833

 
19,911

Accrued maintenance and repairs
28,555

 
22,914

Accrued interest
16,345

 
12,909

Other accrued liabilities
65,978

 
46,679

Deferred taxes

 
830

Short-term borrowings and current maturities of long-term debt
56,700

 
131,063

Total current liabilities
362,897

 
416,354

Long-term debt, less current maturities
1,429,834

 
1,150,956

Accrued pension liabilities
37,034

 
61,647

Other liabilities and deferred credits
36,952

 
28,899

Deferred taxes
115,192

 
154,873

Redeemable noncontrolling interest

 
6,886

Stockholders’ investment:
 
 
 
Common stock
382

 
379

Additional paid-in capital
852,565

 
809,995

Retained earnings
793,783

 
991,906

Accumulated other comprehensive loss
(286,094
)
 
(328,277
)
Treasury shares, at cost
(184,796
)
 
(184,796
)
Total Bristow Group stockholders’ investment
1,175,840

 
1,289,207

Noncontrolling interests
7,253

 
5,025

Total stockholders’ investment
1,183,093

 
1,294,232

Total liabilities, redeemable noncontrolling interest and stockholders’ investment
$
3,165,002

 
$
3,113,847


9

        

BRISTOW GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Full Year
 
FY2018
 
FY2017
Cash flows from operating activities:
 
 
 
Net loss
$
(198,083
)
 
$
(176,890
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
124,042

 
118,748

Deferred income taxes
(49,334
)
 
15,720

Write-off of deferred financing fees
2,969

 
923

Discount amortization on long-term debt
1,701

 
1,606

Loss on disposal of assets
17,595

 
14,499

Loss on impairment
91,400

 
16,278

Deferral of lease payments
3,991

 

Stock-based compensation
10,436

 
12,352

Equity in earnings from unconsolidated affiliates in excess of dividends received
(3,780
)
 
(4,438
)
Increase (decrease) in cash resulting from changes in:
 
 
 
Accounts receivable
(32,459
)
 
23,759

Inventories
(2,154
)
 
(1,958
)
Prepaid expenses and other assets
11,913

 
1,267

Accounts payable
(3,385
)
 
15,052

Accrued liabilities
6,070

 
(19,713
)
Other liabilities and deferred credits
(466
)
 
(5,668
)
Net cash provided by (used in) operating activities
(19,544
)
 
11,537

Cash flows from investing activities:
 
 
 
Capital expenditures
(46,287
)
 
(135,110
)
Proceeds from asset dispositions
48,740

 
18,471

Proceeds from OEM cost recoveries
94,463

 

Deposit received on aircraft held for sale

 
290

Net cash provided by (used in) investing activities
96,916

 
(116,349
)
Cash flows from financing activities:
 
 
 
Proceeds from borrowings
896,874

 
708,267

Payment of contingent consideration

 
(10,000
)
Debt issuance costs
(20,560
)
 
(8,010
)
Repayment of debt and debt redemption premiums
(671,567
)
 
(570,328
)
Purchase of 4½% Convertible Senior Notes call option
(40,393
)
 

Proceeds from issuance of warrants
30,259

 

Partial prepayment of put/call obligation
(49
)
 
(49
)
Dividends paid to noncontrolling interest
(331
)
 
(2,533
)
Common stock dividends paid
(2,465
)
 
(9,831
)
Repurchases for tax withholdings on vesting of equity awards
(2,740
)
 
(835
)
Net cash provided by financing activities
189,028

 
106,681

Effect of exchange rate changes on cash and cash equivalents
17,167

 
(9,523
)
Net increase (decrease) in cash and cash equivalents
283,567

 
(7,654
)
Cash and cash equivalents at beginning of period
96,656

 
104,310

Cash and cash equivalents at end of period
$
380,223

 
$
96,656


10

        


BRISTOW GROUP INC. AND SUBSIDIARIES
SELECTED OPERATING DATA
(In thousands, except flight hours and percentages)
(Unaudited)
 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
FY2018
 
FY2017
Flight hours (excluding Bristow Academy and unconsolidated affiliates):
 
 
 
 
 
 
 
 
Europe Caspian
 
22,347

 
20,203

 
91,109

 
85,906

Africa
 
6,645

 
6,704

 
29,206

 
29,573

Americas
 
7,887

 
6,151

 
31,697

 
23,655

Asia Pacific
 
6,326

 
6,359

 
26,317

 
26,118

Consolidated
 
43,205

 
39,417

 
178,329

 
165,252

 
 
 
 
 
 
 
 
 
Operating revenue:
 
 
 
 
 
 
 
 
Europe Caspian
 
$
194,429

 
$
162,511

 
$
765,412

 
$
710,581

Africa
 
45,307

 
47,049

 
191,830

 
200,104

Americas
 
57,480

 
51,966

 
236,364

 
220,544

Asia Pacific
 
47,825

 
62,628

 
201,190

 
217,772

Corporate and other
 
393

 
2,452

 
4,305

 
10,369

Intra-region eliminations
 
(4,259
)
 
(2,955
)
 
(14,677
)
 
(11,520
)
Consolidated
 
$
341,175

 
$
323,651

 
$
1,384,424

 
$
1,347,850

 
 
 
 
 
 
 
 
 
Operating income (loss):
 
 
 
 
 
 
 
 
Europe Caspian
 
$
3,164

 
$
(4,628
)
 
$
22,774

 
$
13,840

Africa
 
3,973

 
10,225

 
32,326

 
30,179

Americas
 
(84,592
)
 
(1,566
)
 
(73,057
)
 
4,224

Asia Pacific
 
(4,916
)
 
3,610

 
(24,290
)
 
(20,870
)
Corporate and other
 
(20,287
)
 
(25,747
)
 
(88,996
)
 
(104,616
)
Loss on disposal of assets
 
(5,177
)
 
(1,422
)
 
(17,595
)
 
(14,499
)
Consolidated
 
$
(107,835
)
 
$
(19,528
)
 
$
(148,838
)
 
$
(91,742
)
 
 
 
 
 
 
 
 
 
Operating margin:
 
 
 
 
 
 
 
 
Europe Caspian
 
1.6
 %
 
(2.8
)%
 
3.0
 %
 
1.9
 %
Africa
 
8.8
 %
 
21.7
 %
 
16.9
 %
 
15.1
 %
Americas
 
(147.2
)%
 
(3.0
)%
 
(30.9
)%
 
1.9
 %
Asia Pacific
 
(10.3
)%
 
5.8
 %
 
(12.1
)%
 
(9.6
)%
Consolidated
 
(31.6
)%
 
(6.0
)%
 
(10.8
)%
 
(6.8
)%
 
 
 
 
 
 
 
 
 
Adjusted EBITDA:
 
 
 
 
 
 
 
 
Europe Caspian
 
$
22,787

 
$
1,890

 
$
81,503

 
$
45,163

Africa
 
12,213

 
12,203

 
52,419

 
51,553

Americas
 
7,580

 
5,635

 
41,010

 
39,952

Asia Pacific
 
(1,926
)
 
5,487

 
(1,424
)
 
(5,026
)
Corporate and other
 
(17,772
)
 
(21,528
)
 
(68,081
)
 
(60,558
)
Consolidated
 
$
22,882

 
$
3,687

 
$
105,427

 
$
71,084

 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin:
 
 
 
 
 
 
 
 
Europe Caspian
 
11.7
 %
 
1.2
 %
 
10.6
 %
 
6.4
 %
Africa
 
27.0
 %
 
25.9
 %
 
27.3
 %
 
25.8
 %
Americas
 
13.2
 %
 
10.8
 %
 
17.4
 %
 
18.1
 %
Asia Pacific
 
(4.0
)%
 
8.8
 %
 
(0.7
)%
 
(2.3
)%
Consolidated
 
6.7
 %
 
1.1
 %
 
7.6
 %
 
5.3
 %


11

        


 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
FY2018
 
FY2017
Depreciation and amortization:
 
 
 
 
 
 
 
 
Europe Caspian
 
$
12,065

 
$
5,917

 
$
48,854

 
$
39,511

Africa
 
3,375

 
3,984

 
13,705

 
16,664

Americas
 
6,562

 
7,058

 
27,468

 
32,727

Asia Pacific
 
4,348

 
5,505

 
19,695

 
19,091

Corporate and other
 
3,573

 
3,230

 
14,320

 
10,755

Consolidated
 
$
29,923

 
$
25,694

 
$
124,042

 
$
118,748

 
 
 
 
 
 
 
 
 
Rent expense:
 
 
 
 
 
 
 
 
Europe Caspian
 
$
31,355

 
$
34,065

 
$
134,158

 
$
134,072

Africa
 
2,133

 
2,000

 
8,557

 
8,101

Americas
 
6,440

 
6,757

 
24,920

 
23,015

Asia Pacific
 
8,552

 
10,956

 
32,908

 
39,759

Corporate and other
 
1,692

 
1,940

 
8,148

 
7,661

Consolidated
 
$
50,172

 
$
55,718

 
$
208,691

 
$
212,608



12

        

BRISTOW GROUP INC. AND SUBSIDIARIES
AIRCRAFT COUNT
As of March 31, 2018
(Unaudited)

 
 
 
Aircraft in Consolidated Fleet
 
 
 
 
Percentage
of FY2018
Operating
Revenue
 
Helicopters
 
 
 
 
 
Small
 
Medium
 
Large
 
Fixed
Wing (1)
 
Total (2)(3)
 
Unconsolidated
Affiliates (4)
 
 
 
 
 
Total
Europe Caspian
55
%
 

 
16

 
82

 
34

 
132

 

 
132

Africa
14
%
 
9

 
28

 
4

 
4

 
45

 
48

 
93

Americas
17
%
 
16

 
41

 
16

 

 
73

 
62

 
135

Asia Pacific
14
%
 

 
10

 
21

 
14

 
45

 

 
45

Total
100
%
 
25

 
95

 
123

 
52

 
295

 
110

 
405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aircraft not currently in
  fleet: (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On order
 
 

 

 
27

 

 
27

 
 
 
Under option
 
 

 

 
4

 

 
4

 
 
 
_______________ 
(1) 
Includes 34 fixed wing aircraft operated by Eastern Airways that are included in the Europe Caspian region, three fixed wing aircraft for which Eastern Airways provides technical support in our Africa region and 14 fixed wing aircraft operated by Airnorth that are included in the Asia Pacific region.
(2) 
Includes 11 aircraft held for sale and 105 leased aircraft as follows:
  
 
Held for Sale Aircraft in Consolidated Fleet
  
 
Helicopters
 
 
 
  
 
Small
 
Medium
 
Large
 
Fixed
Wing
 
Total
Europe Caspian
 

 
2

 

 

 
2

Africa
 

 
3

 

 
1

 
4

Americas
 

 
4

 

 

 
4

Asia Pacific
 

 

 

 
1

 
1

Total
 

 
9

 

 
2

 
11

 
 
 
 
 
 
 
 
 
 
 
  
 
Leased Aircraft in Consolidated Fleet
  
 
Helicopters
 
 
 
  
 
Small
 
Medium
 
Large
 
Fixed
Wing
 
Total
Europe Caspian
 

 
6

 
42

 
15

 
63

Africa
 

 
1

 
2

 
2

 
5

Americas
 
3

 
14

 
6

 

 
23

Asia Pacific
 

 
3

 
7

 
4

 
14

Total
 
3

 
24

 
57

 
21

 
105


(3) 
The average age of our fleet, excluding training aircraft, was nine years as of March 31, 2018.
(4) 
The 110 aircraft operated by our unconsolidated affiliates do not include those aircraft leased to us. Includes 41 helicopters (primarily medium) and 20 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Americas region, 41 helicopters and seven fixed wing aircraft owned by Petroleum Air Services, which is included in our Africa region, and one helicopter operated by Cougar, our unconsolidated affiliate in Canada, which is included in our Americas region.
(5) 
This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.


13

        




BRISTOW GROUP INC. AND SUBSIDIARIES
FY 2019 GUIDANCE

FY 2019 guidance as of March 31, 2018 (1)
 
Operating revenue 2
Adjusted EBITDA2,3
Rent2
Oil and gas
~$825M - $925M
~$20M - $50M
~$115M - $125M
U.K. SAR
~$230M - $240M
~$70M - $80M
~$45M - $50M
Eastern
~$90M - $100M
~$(5M) - $0M
~$10M - $12M
Airnorth
~$80M - $90M
~$5M - $10M
~$8M - $10M
Total
~$1.25B - $1.35B
~$90M - $140M
~$185M - $195M
 
 
 
 
G&A expense
~$150M - $170M
 
 
Depreciation expense
~$115M - $125M
 
 
Total aircraft rent 4
~$160M - $165M
 
 
Total non-aircraft rent 4
~$25M - $30M
 
 
Interest expense
~$100M - $110M
 
 
Non-aircraft capex
~$25M annually
 
 
Aircraft sale proceeds
~$15M annually
 
 
_____________ 
(1) 
FY 2019 guidance assumes foreign exchange rates as of March 31, 2018.
(2) 
Operating revenue, adjusted EBITDA and rent for oil and gas includes corporate and other revenue and the impact of corporate overhead expenses.
(3) 
Adjusted EBITDA for U.K. SAR and fixed wing (Eastern/Airnorth) excludes corporate overhead allocations consistent with financial reporting. Adjusted EBITDA is a non-GAAP measure of which the most comparable GAAP measure is net income (loss). We have not provided a reconciliation of this non-GAAP forward-looking information to GAAP. The most comparable GAAP measure to adjusted EBITDA is net income (loss), which is not calculated at this lower level of our business as we do not allocate certain costs, including corporate and other overhead costs, interest expense and income taxes within our accounting system. Providing this data would require unreasonable efforts in the form of allocations of other costs across the organization.
(4) 
Total aircraft rent and total non-aircraft rent are inclusive of the respective components of rent expense for U.K. SAR, Eastern, Airnorth plus oil and gas.

14

        

BRISTOW GROUP INC. AND SUBSIDIARIES
GAAP RECONCILIATIONS
(Unaudited)

These financial measures have not been prepared in accordance with generally accepted accounting principles (“GAAP”) and have not been audited or reviewed by our independent auditor. These financial measures are therefore considered non-GAAP financial measures. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:

 
 
Fourth Quarter
 
Full Year
 
 
FY2018
 
FY2017
 
FY2018
 
FY2017
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except per share amounts and percentages)
Net loss
 
$
(101,004
)
 
$
(79,663
)
 
$
(198,083
)
 
$
(176,890
)
Loss on disposal of assets
 
5,177

 
1,422

 
17,595

 
14,499

Special items
 
98,675

 
(3,084
)
 
115,027

 
31,277

Depreciation and amortization
 
29,923

 
25,694

 
124,042

 
118,748

Interest expense
 
23,548

 
15,692

 
77,737

 
50,862

Provision (benefit) for income taxes
 
(33,437
)
 
43,626

 
(30,891
)
 
32,588

Adjusted EBITDA
 
$
22,882

 
$
3,687

 
$
105,427

 
$
71,084

 
 
 
 
 
 
 
 
 
Benefit (provision) for income taxes
 
$
33,437

 
(43,626
)
 
$
30,891

 
$
(32,588
)
Tax provision (benefit) on loss on disposal of asset
 
34,882

 
(618
)
 
42,943

 
(6,476
)
Tax provision (benefit) on special items
 
(56,729
)
 
38,923

 
(58,016
)
 
49,342

Adjusted benefit (provision) for income taxes
 
$
11,590

 
$
(5,321
)
 
$
15,818

 
$
10,278

 
 
 
 
 
 
 
 
 
Effective tax rate (1)
 
24.9
%
 
(121.1
)%
 
13.5
%
 
(22.6
)%
Adjusted effective tax rate (1)
 
40.3
%
 
(14.5
)%
 
17.0
%
 
11.7
 %
 
 
 
 
 
 
 
 
 
Net loss attributable to Bristow Group
 
$
(100,901
)
 
$
(78,040
)
 
$
(195,658
)
 
$
(170,536
)
Loss on disposal of assets
 
40,059

 
804

 
60,538

 
8,023

Special items
 
43,804

 
36,934

 
60,113

 
87,988

Adjusted net loss
 
$
(17,038
)
 
$
(40,302
)
 
$
(75,007
)
 
$
(74,525
)
 
 
 
 
 
 
 
 
 
Diluted loss per share
 
$
(2.84
)
 
$
(2.22
)
 
$
(5.54
)
 
$
(4.87
)
Loss on disposal of assets
 
1.13

 
0.02

 
1.72

 
0.23

Special items
 
1.23

 
1.05

 
1.70

 
2.51

Adjusted diluted loss per share
 
(0.48
)
 
(1.15
)
 
(2.13
)
 
(2.13
)
_______________ 
(1) 
Effective tax rate is calculated by dividing benefit (provision) for income taxes by pretax net income. Adjusted effective tax rate is calculated by dividing adjusted benefit (provision) for income taxes by adjusted pretax net income. Tax expense (benefit) on loss on disposal of asset and tax expense (benefit) on special items is calculated using the statutory rate of the entity recording the loss on disposal of asset or special item.







15

        



 
 
Three Months Ended 
 March 31, 2018
 
 
Adjusted
EBITDA
 
Adjusted
Net Income
 
Adjusted
Diluted
Earnings
Per Share