Offshore Logistics, Inc.
224 Rue De Jean – 70508
Post Office Box 5C
Lafayette, Louisiana 70505
Tel: (337) 233-1221
Fax: (337) 235-6678
OFFSHORE LOGISTICS, INC. ANNOUNCES EARNINGS
FOR
THE THIRD FISCAL QUARTER ENDED
December 31, 2003
LAFAYETTE, LOUISIANA (February 10, 2004) – Offshore Logistics, Inc. (NYSE: OLG) today reported net income for the third quarter ended December 31, 2003 of $2.8 million, or $0.12 per diluted share, on revenues of $139.1 million, compared to net income of $12.0 million, or $0.49 per diluted share, on revenues of $139.2 million for the third quarter ended December 31, 2002. Included in the net income reported for the third quarter ended December 31, 2003 is $3.0 million (pre-tax), or $0.09 per diluted share, of expenses related to the Company’s restructuring of its United Kingdom operations.
Net income for the nine months ended December 31, 2003 was $19.6 million, or $0.86 per diluted share on revenues of $414.6 million, compared to net income of $34.0 million, or $1.39 per diluted share on revenues of $420.1 million for the nine months ended December 31, 2002. Included in the net income reported for the nine months ended December 31, 2003 is $3.0 million (pre-tax), or $0.09 per diluted share, of expenses related to the Company’s restructuring of its United Kingdom operations and $6.2 million (pre-tax), or $0.19 per diluted share, of debt restructuring costs relating to the issuance of $230 million senior notes and related redemptions.
George Small, Chief Executive Officer and President of Offshore Logistics, Inc. said, "Our third quarter results were negatively impacted by reduced activity in the North Sea, higher costs in certain areas within our International division and foreign exchange losses due to the weakening of the U.S. dollar.
In the North Sea, flight activity decreased 15% during our third quarter compared to the similar period last year, resulting in slightly below breakeven operating income. Our previously announced United Kingdom restructuring plans are being executed, and based on progress made to date, we hope to achieve approximately $15.0 million in annual cost savings phased in over the next two quarters.
Our International margins declined during the quarter to 10.6% due primarily to higher costs in certain operating areas, despite some increases in flight hours and revenues. We are taking corrective action.
Operationally, North America was the bright spot for the quarter. Margins in this region improved to 17.9% from 15.0% in the similar quarter last year, in-spite of little change in flight activity for the quarter, as exploration and production activity remained relatively flat in the Gulf of Mexico. The increase in margin is attributed to rate increases made earlier this calendar year.
Finally, the weakening of the dollar against the euro and pound sterling resulted in a third quarter $3.8 million (pre-tax) or $0.12 per diluted share transaction loss from our U.K. based operations on the portion of its business denominated in dollars. These losses compare to $1.0 million (pre tax) or $0.02 per diluted share loss for the similar quarter in the prior year."
OLOG will conduct a telephonic conference to discuss its third quarter results with analysts, investors and other interested parties at 10:00 a.m. Central Time on Wednesday, February 11, 2004. Individuals wishing to access the conference call should dial (877) 822-9020 for domestic callers and (706) 679-7181 for international callers, approximately five to ten minutes prior to the start time. Please reference the Offshore Logistics, Inc. conference call hosted by George Small, Conference ID No. 5281909. A replay of the conference call will be available two hours after completion of the teleconference. To hear that recording, dial (800) 642-1687 for domestic callers and (706) 645-9291 for international callers, and enter Conference ID number 5281909. The replay will be available until 11:59 PM EST, Wednesday, February 18, 2004.
Offshore Logistics, Inc. is a major provider of helicopter transportation services to the oil and gas industry worldwide. Through its subsidiaries, affiliates and joint ventures, the Company provides transportation services in most oil and gas producing regions including the United States Gulf of Mexico and Alaska, the North Sea, Africa, Mexico, South America, Australia, Egypt and the Far East. The Company’s Common Stock is traded on the New York Stock Exchange under the symbol OLG.
The tabulated results for the periods ended December 31, 2003 and 2002, are as follows (amounts in thousands, except earnings per share):
| Three Months Ended December 31, |
Nine Months Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003
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2002
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2003
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2002
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| Revenue | $ 139,072 | $ 139,241 | $ 414,625 | $ | 420,139 | |||||||||
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| Net Income | $ 2,790 | $ 12,018 | $ 19,558 | $ | 33,983 | |||||||||
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| BASIC: | ||||||||||||||
| Earnings per common share | $ 0.12 | $ 0.53 | $ 0.87 | $ | 1.52 | |||||||||
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| Weighted average number of | ||||||||||||||
| common shares outstanding | 22,555 | 22,499 | 22,527 | 22,404 | ||||||||||
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| DILUTED: | ||||||||||||||
| Earnings per common share | $ 0.12 | $ 0.49 | $ 0.86 | $ | 1.39 | |||||||||
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| Weighted average number of | ||||||||||||||
| common shares outstanding and | ||||||||||||||
| assumed conversions | 22,808 | 26,640 | 22,697 | 26,547 | ||||||||||
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Selected operating data:
| Three Months Ended December 31, |
Nine Months Ended December 31, | |||||||||||||
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| 2003
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2002
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2003
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2002
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| (in thousands, except flight hours) | ||||||||||||||
| Flight hours (excluding unconsolidated affiliates): | ||||||||||||||
| Helicopter activities: | ||||||||||||||
| North American Operations | 29,369 | 29,859 | 94,394 | 96,879 | ||||||||||
| North Sea Operations | 10,399 | 12,226 | 33,542 | 37,835 | ||||||||||
| International Operations | 22,589 | 22,438 | 65,807 | 63,849 | ||||||||||
| Technical Services | 548 | 310 | 1,305 | 1,027 | ||||||||||
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| Total | 62,905 | 64,833 | 195,048 | 199,590 | ||||||||||
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| Operating revenue: | ||||||||||||||
| Helicopter activities: | ||||||||||||||
| North American Operations | $ | 39,416 | $ | 38,161 | $ | 119,925 | $ | 114,986 | ||||||
| North Sea Operations | 43,083 | 47,863 | 131,834 | 146,722 | ||||||||||
| International Operations | 46,138 | 43,022 | 129,735 | 122,553 | ||||||||||
| Technical Services | 14,606 | 9,707 | 30,686 | 30,304 | ||||||||||
| Less: Intercompany | (15,646 | ) | (9,047 | ) | (32,140 | ) | (27,346 | ) | ||||||
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| Total | 127,597 | 129,706 | 380,040 | 387,219 | ||||||||||
| Production Management Services | 12,611 | 11,837 | 36,302 | 35,776 | ||||||||||
| Corporate | 2,925 | 2,904 | 8,877 | 8,790 | ||||||||||
| Less: Intercompany | (4,418 | ) | (4,260 | ) | (13,182 | ) | (12,953 | ) | ||||||
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| Consolidated total | $ | 138,715 | $ | 140,187 | $ | 412,037 | $ | 418,832 | ||||||
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| Operating income: | ||||||||||||||
| Helicopter activities: | ||||||||||||||
| North American Operations | $ | 7,070 | $ | 5,727 | $ | 20,628 | $ | 14,681 | ||||||
| North Sea Operations | (437 | ) | 6,783 | 8,261 | 19,524 | |||||||||
| International Operations | 4,907 | 6,436 | 16,656 | 20,416 | ||||||||||
| Technical Services | 1,023 | 1,237 | 1,296 | 2,510 | ||||||||||
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| Total | 12,563 | 20,183 | 46,841 | 57,131 | ||||||||||
| Production Management Services | 540 | 686 | 1,942 | 2,479 | ||||||||||
| Corporate | (2,690 | ) | (982 | ) | (4,107 | ) | (2,977 | ) | ||||||
| Gain (loss) on disposal of assets | 357 | (946 | ) | 2,588 | 1,307 | |||||||||
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| Consolidated total | $ | 10,770 | $ | 18,941 | $ | 47,264 | $ | 57,940 | ||||||
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| Operating margin: | ||||||||||||||
| Helicopter activities: | ||||||||||||||
| North American Operations | 17.9 | % | 15.0 | % | 17.2 | % | 12.8 | % | ||||||
| North Sea Operations | (1.0 | %) | 14.2 | % | 6.3 | % | 13.3 | % | ||||||
| International Operations | 10.6 | % | 15.0 | % | 12.8 | % | 16.7 | % | ||||||
| Technical Services | 7.0 | % | 12.7 | % | 4.2 | % | 8.3 | % | ||||||
| Total | 9.8 | % | 15.6 | % | 12.3 | % | 14.8 | % | ||||||
| Production Management Services | 4.3 | % | 5.8 | % | 5.3 | % | 6.9 | % | ||||||
| Consolidated total | 7.8 | % | 13.5 | % | 11.5 | % | 13.8 | % | ||||||
Statements contained in this press release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements contained in this press release include the possibility that the Company is unable to achieve the cost savings and the operational and managerial efficiencies anticipated in its North Sea Operations, that the Company is unable to reverse the increasing cost trend in certain international areas, that North American Operations do not retain their current levels of flight activity and profitability and that the Company continues to suffer significant losses on foreign currency transactions. 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 report on Form 10-K for the year ended March 31, 2003 and the Company’s report on Form 10-Q for the quarters ended June 30, 2003 and September 30, 2003. Copies of these may be obtained by contacting the Company or the SEC.
Investor Relations Contact:
H. Eddy Dupuis
Phone:
(337) 233-1221
Fax: (337) 235-6678
investorrelations@olog.com
| Three Months Ended December 31, |
Nine Months Ended December 31, | |||||||||||||
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| 2003
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2002
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2003
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2002
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| (in thousands, except per share amounts) | ||||||||||||||
| Gross revenue: | ||||||||||||||
| Operating revenue | $ | 138,715 | $ | 140,187 | $ | 412,037 | $ | 418,832 | ||||||
| Gain (loss) on disposal of assets | 357 | (946 | ) | 2,588 | 1,307 | |||||||||
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| 139,072 | 139,241 | 414,625 | 420,139 | |||||||||||
| Operating expenses: | ||||||||||||||
| Direct cost | 107,551 | 101,555 | 310,224 | 308,112 | ||||||||||
| Depreciation and amortization | 9,778 | 9,575 | 29,077 | 27,860 | ||||||||||
| General and administrative | 10,973 | 9,170 | 28,060 | 26,227 | ||||||||||
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| 128,302 | 120,300 | 367,361 | 362,199 | |||||||||||
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| Operating income | 10,770 | 18,941 | 47,264 | 57,940 | ||||||||||
| Earnings from unconsolidated affiliates, net | 1,930 | 3,277 | 6,880 | 6,728 | ||||||||||
| Interest income | 280 | 474 | 1,328 | 1,121 | ||||||||||
| Interest expense | 3,818 | 3,615 | 12,773 | 10,893 | ||||||||||
| Loss on extinguishment of debt | -- | -- | (6,205 | ) | -- | |||||||||
| Other income (expense), net | (4,352 | ) | (1,244 | ) | (6,246 | ) | (4,473 | ) | ||||||
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| Income before provision for income taxes and | ||||||||||||||
| minority interest | 4,810 | 17,833 | 30,248 | 50,423 | ||||||||||
| Provision for income taxes | 1,444 | 5,350 | 9,075 | 15,127 | ||||||||||
| Minority interest | (576 | ) | (465 | ) | (1,615 | ) | (1,313 | ) | ||||||
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| Net income | $ | 2,790 | $ | 12,018 | $ | 19,558 | $ | 33,983 | ||||||
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| Net income per common share: | ||||||||||||||
| Basic | $ | 0.12 | $ | 0.53 | $ | 0.87 | $ | 1.52 | ||||||
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| Diluted | $ | 0.12 | $ | 0.49 | $ | 0.86 | $ | 1.39 | ||||||
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| December31, 2003 |
March 31, 2003 | |||||||||||||
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| (in thousands) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | 79,225 | $ | 56,800 | ||||||||||
| Accounts receivable | 125,265 | 119,012 | ||||||||||||
| Inventories | 131,535 | 118,846 | ||||||||||||
| Prepaid expenses and other | 8,841 | 8,443 | ||||||||||||
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| Total current assets | 344,866 | 303,101 | ||||||||||||
| Investments in unconsolidated affiliates | 37,772 | 27,928 | ||||||||||||
| Property and equipment - at cost: | ||||||||||||||
| Land and buildings | 25,802 | 16,671 | ||||||||||||
| Aircraft and equipment | 778,282 | 703,111 | ||||||||||||
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| 804,084 | 719,782 | |||||||||||||
| Less: Accumulated depreciation and amortization | (227,434 | ) | (193,555 | ) | ||||||||||
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| 576,650 | 526,227 | |||||||||||||
| Other assets | 46,238 | 48,775 | ||||||||||||
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| $ | 1,005,526 | $ | 906,031 | |||||||||||
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| Current Liabilities: | ||||||||
| Accounts payable | $ | 29,153 | $ | 29,666 | ||||
| Accrued liabilities | 69,293 | 64,181 | ||||||
| Deferred taxes | 1,025 | 33 | ||||||
| Current maturities of long-term debt | 995 | 96,684 | ||||||
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| Total current liabilities | 100,466 | 190,564 | ||||||
Long-term debt, less current maturities |
251,383 | 136,134 | ||||||
| Other liabilities and deferred credits | 136,494 | 120,035 | ||||||
| Deferred taxes | 84,084 | 81,082 | ||||||
| Minority interest | 20,438 | 16,555 | ||||||
Stockholders' Investment: |
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| Common Stock, $.01 par value, authorized 35,000,000 | ||||||||
| shares; 22,583,921 outstanding at December 31, 2003 and 22,510,921 | ||||||||
| at March 31, 2003 (exclusive of 1,281,050 treasury shares) | 226 | 225 | ||||||
| Additional paid-in capital | 140,383 | 139,046 | ||||||
| Retained earnings | 319,056 | 299,498 | ||||||
| Accumulated other comprehensive income (loss) | (47,004 | ) | (77,108 | ) | ||||
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| 412,661 | 361,661 | |||||||
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| $ | 1,005,526 | $ | 906,031 | |||||
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