OLG Offshore Logistic

Offshore Logistics, Inc. (NYSE:OLG) today reported net income for the 2005 fiscal year ended March 31, 2005 of $56.3 million, or $2.41 per diluted share, on revenues of $626.3 million, compared to net income of $53.1 million, or $2.29 per diluted share, on revenues of $567.6 million for the 2004 fiscal year ended March 31, 2004. Included in net income for the 2004 fiscal year is a non-cash curtailment gain of $21.7 million ($15.7 million after taxes) or $0.65 per diluted share, resulting from changes made to the Company's pension plan for certain United Kingdom based employees. These changes, effective February 1, 2004, convert benefits for future employee service from a defined benefit arrangement to a defined contribution arrangement. Without this non-cash gain, earnings per diluted share would have been $1.64 for the 2004 fiscal year. Net income for the quarter ended March 31, 2005 was $13.8 million, or $0.58 per diluted share on revenues of $156.1 million, compared to net income of $33.5 million or $1.47 per diluted share, on revenues of $153.0 million for the quarter ended March 31, 2004. Included in net income for the quarter ended March 31, 2004 is the non-cash gain of $21.7 million ($15.7 million after taxes) or $0.69 per diluted share discussed above, cost savings from the ongoing operation of the pension plan of $2.7 million ($2.0 million after taxes) or $0.09 per diluted share, retroactive rate settlements with certain North Sea customers of $3.4 million ($2.5 million after taxes) or $0.11 per diluted share, and insurance premium rebates of $2.5 million ($1.8 million after taxes) or $0.08 per diluted share. Without these four items, earnings per diluted share would have been $0.50 for the quarter ended March 31, 2004. William E. Chiles, CEO and President of Offshore Logistics, Inc., said "International operating revenues were up significantly from the same quarter last year and at a similar level as the prior quarter. This reflects our continued progress in fiscal 2005 growing our presence in overseas drilling markets. International operating income was also slightly higher in the fourth quarter than a year ago; it was lower than the prior quarter due to increased operating expenses. In our North Sea segment, operating revenues were down marginally from the same quarter a year ago and from the prior quarter. Our flight hours, however, showed a marked decrease from both periods due to a change in a lease arrangement in Norway. We no longer provide maintenance services for our aircraft operated through our unconsolidated affiliate, Norsk Helikopter AS, although we do continue to lease aircraft to them. Therefore, we no longer report Norsk Helikopter flight hours. Our North Sea operating income fell significantly compared with both the year ago and prior quarters due to one time maintenance costs in the fourth quarter. Our North American flight hours were down from both the year ago period and the prior quarter, reflecting a weaker than expected recovery in Gulf of Mexico activity. However, operating revenue did not show a corresponding decline due to a rate increase that was phased-in throughout fiscal 2004. Operating income was down compared with the fourth quarter of fiscal 2004 but was relatively consistent with the prior quarter. Overall, our earnings of $0.58 per diluted share compare favorably with $0.50 in the year ago quarter adjusted for the four items discussed previously, and $0.49 per diluted share in the third quarter of fiscal 2005. These results reflect our continuing commitment to hold down our costs while providing the high quality service our customers have come to expect from us. We remain focused on expanding our operations into overseas areas where drilling activity is rising, even as we also do our best to maximize profitability in both the North Sea and North America, which remain very important to our success." At March 31, 2005, the Company's consolidated balance sheet reflected $514.1 million in shareholders' investment, $146.4 million in cash and $262.1 million of indebtedness. As previously disclosed in the Company's Form 10-Q, the Company voluntarily advised the staff of the U.S. Securities and Exchange Commission that the Company's Audit Committee had engaged outside counsel to undertake a review of certain payments made by affiliated entities in foreign countries. Based on the results to date, the Company does not believe its historical financial statements, or its fiscal 2005 results, will be materially impacted. The Company does not anticipate that it will be able to file its Form 10-K on a timely basis. At this time, the Company cannot reasonably estimate how long the filing of its Form 10-K will be delayed as this is dependent in part on the ongoing Audit Committee review. 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, Russia, 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 March 31, 2005 and 2004, are as follows (amounts in thousands, except earnings per share): -0- *T Three Months Ended Year Ended March 31, March 31, ------------------ ------------------ 2005 2004 2005 2004 -------- -------- -------- -------- Revenue $156,089 $152,967 $626,349 $567,592 ======== ======== ======== ======== Net Income $ 13,753 $ 33,546 $ 56,258 $ 53,104 ======== ======== ======== ======== BASIC: Earnings per common share $ 0.59 $ 1.48 $ 2.44 $ 2.36 ======== ======== ======== ======== Weighted average number of common shares outstanding 23,304 22,600 23,041 22,545 ======== ======== ======== ======== DILUTED: Earnings per common share $ 0.58 $ 1.47 $ 2.41 $ 2.29 ======== ======== ======== ======== Weighted average number of common shares outstanding and assumed conversions 23,560 22,787 23,381 24,013 ======== ======== ======== ======== Selected operating data: Three Months Ended Twelve Months Ended March 31, March 31, ------------------ -------------------- 2005 2004 2005 2004 --------- --------- --------- --------- (in thousands, except flight hours) Flight hours (excluding unconsolidated affiliates): Helicopter activities: North American Operations 25,767 29,094 118,371 123,488 North Sea Operations 8,035 9,602 38,556 43,144 International Operations 20,058 22,470 89,205 88,278 Technical Services -- 577 1,421 1,882 --------- --------- --------- --------- Total 53,860 61,743 247,553 256,792 ========= ========= ========= ========= Operating revenue: Helicopter activities: North American Operations $ 39,323 $ 40,475 $163,869 $160,400 North Sea Operations 47,351 48,871 193,476 180,705 International Operations 56,945 46,596 216,106 176,331 Technical Services 8,688 14,011 34,186 44,697 Less: Intercompany (10,714) (10,559) (41,731) (42,699) --------- --------- --------- --------- Total 141,593 139,394 565,906 519,434 Production Management Services 15,717 13,513 58,981 49,815 Corporate 2,908 3,882 10,464 12,759 Less: Intercompany (3,991) (5,177) (17,041) (18,359) --------- --------- --------- --------- Consolidated total $156,227 $151,612 $618,310 $563,649 ========= ========= ========= ========= Operating expenses: Helicopter activities: North American Operations $ 34,264 $ 33,281 $139,999 $132,577 North Sea Operations 43,547 38,168 164,502 161,740 International Operations 50,467 41,394 186,898 154,473 Technical Services 7,542 12,731 36,053 42,121 Less: Intercompany (10,714) (10,559) (41,731) (42,699) --------- --------- --------- --------- Total 125,106 115,015 485,721 448,212 Production Management Services 14,796 12,941 55,074 47,302 Corporate 5,944 5,712 21,063 18,697 Less: Intercompany (3,991) (5,177) (17,041) (18,359) --------- --------- --------- --------- Consolidated total $141,855 $128,491 $544,817 $495,852 ========= ========= ========= ========= Operating income: Helicopter activities: North American Operations $ 5,059 $ 7,194 $ 23,870 $ 27,823 North Sea Operations 3,804 10,703 28,974 18,965 International Operations 6,478 5,202 29,208 21,858 Technical Services 1,146 1,280 (1,867) 2,576 Curtailment gain allocated to Helicopter Activities -- 20,365 -- 20,365 --------- --------- --------- --------- Total 16,487 44,744 80,185 91,587 Production Management Services 921 572 3,907 2,513 Corporate (3,036) (1,830) (10,599) (5,938) Curtailment gain allocated to Corporate -- 1,300 -- 1,300 Gain (loss) on disposal of assets (138) 1,355 8,039 3,943 --------- --------- --------- --------- Consolidated total $ 14,234 $ 46,141 $ 81,532 $ 93,405 ========= ========= ========= ========= Operating margin: Helicopter activities: North American Operations 12.9% 17.8% 14.6% 17.3% North Sea Operations 8.0% 21.9% 15.0% 10.5% International Operations 11.4% 11.2% 13.5% 12.4% Technical Services 13.2% 9.1% (5.5)% 5.8% Total 11.6% 32.1% 14.2% 17.6% Production Management Services 5.9% 4.2% 6.6% 5.0% Consolidated total 9.1% 30.4% 13.2% 16.6% *T 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 as defined under the Private Securities Litigation Reform Act of 1995, as amended. 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, without limitation, that the results of the Audit Committee's internal review or its effect on previously reported financial results may differ from our expectations, that drilling activity fails to increase internationally, that we fail to identify overseas areas where drilling activity is rising, and that we fail to expand in such areas. 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, 2004 and the Company's reports on Form 10-Q for the quarters ended June 30, September 30 and December 31, 2004. Copies of these may be obtained by contacting the Company or the SEC. -0- *T OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statements of Income Three Months Ended Twelve Months Ended March 31, March 31, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- (unaudited) (unaudited) (in thousands, except per share amounts) GROSS REVENUE Operating revenue $156,227 $151,612 $618,310 $563,649 Gain on disposal of assets (138) 1,355 8,039 3,943 --------- --------- --------- --------- 156,089 152,967 626,349 567,592 OPERATING EXPENSES Direct cost 120,820 107,193 458,879 417,417 Depreciation and amortization 8,873 10,466 40,693 39,543 General and administrative 12,162 10,832 45,245 38,892 --------- --------- --------- --------- 141,855 128,491 544,817 495,852 Curtailment gain -- 21,665 -- 21,665 --------- --------- --------- --------- OPERATING INCOME 14,234 46,141 81,532 93,405 Earnings from unconsolidated affiliates, net 3,910 4,159 9,600 11,039 Interest income 1,020 361 3,188 1,689 Interest expense (3,695) (4,056) (15,665) (16,829) Loss on extinguishment of debt -- -- -- (6,205) Other income (expense), net 912 (1,564) (1,126) (7,810) --------- --------- --------- --------- INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST 16,381 45,041 77,529 75,289 Provision for income taxes 2,717 11,728 21,061 20,803 Minority interest 89 233 (210) (1,382) --------- --------- --------- --------- NET INCOME $ 13,753 $ 33,546 $ 56,258 $ 53,104 ========= ========= ========= ========= Net income per common share: Basic $ 0.59 $ 1.48 $ 2.44 $ 2.36 ========= ========= ========= ========= Diluted $ 0.58 $ 1.47 $ 2.41 $ 2.29 ========= ========= ========= ========= OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Balance Sheets March 31, March 31, 2005 2004 ----------- ----------- (unaudited) (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 146,440 $ 85,679 Accounts receivable 133,839 122,421 Inventories 140,706 133,073 Prepaid expenses and other 11,459 10,874 ----------- ----------- Total current assets 432,444 352,047 Investments in unconsolidated affiliates 37,176 38,929 Property and equipment - at cost: Land and buildings 32,543 26,594 Aircraft and equipment 827,031 797,783 ----------- ----------- 859,574 824,377 Less: Accumulated depreciation and amortization (250,512) (238,721) ----------- ----------- 609,062 585,656 Goodwill 26,809 26,829 Other assets 44,085 42,717 ----------- ----------- $1,149,576 $1,046,178 =========== =========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts payable $ 35,640 $ 28,714 Accrued liabilities 79,572 65,257 Deferred taxes 21,615 1,802 Current maturities of long-term debt 6,413 4,417 ----------- ----------- Total current liabilities 143,240 100,190 Long-term debt, less current maturities 255,667 251,117 Other liabilities and deferred credits 164,728 147,326 Deferred taxes 67,302 92,042 Minority interest 4,514 9,385 Stockholders' Investment: Common Stock, $.01 par value, authorized 35,000,000 shares; outstanding 23,314,708 in 2005 and 22,631,221 in 2004 (exclusive of 1,281,050 treasury shares) 233 226 Additional paid-in capital 156,981 141,384 Retained earnings 408,860 352,602 Accumulated other comprehensive income (loss) (51,949) (48,094) ----------- ----------- 514,125 446,118 ----------- ----------- $1,149,576 $1,046,178 =========== =========== *T