November 9, 2018 - 5:31 PM EST
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PHI, Inc. Announces Results for the Third Quarter Ended September 30, 2018

LAFAYETTE, La.

PHI, Inc. (The Nasdaq Select Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended September 30, 2018.

Consolidated operating revenues for the quarter ended September 30, 2018 were $168.8 million, compared to $150.2 million for the quarter ended September 30, 2017, an increase of $18.6 million. Oil and Gas segment operating revenues increased $17.6 million for the quarter ended September 30, 2018. This increase is attributable principally to revenue derived from our recently-acquired HNZ offshore business and from an increase in revenues in our legacy international operations. Air Medical segment operating revenues remained unchanged at $70.2 million for the quarter ended September 30, 2018 and September 30, 2017. Technical Services segment operating revenues increased $1.1 million. Consolidated net loss for the quarter ended September 30, 2018 was $11.5 million compared to net loss of $3.3 million for the quarter ended September 30, 2017.

Oil and Gas segment loss was $5.8 million for the quarter ended September 30, 2018, compared to a loss of $6.9 million for the quarter ended September 30, 2017. The $1.1 million decrease in segment loss is primarily attributable to profit from our HNZ offshore business and PHI legacy international operations, as well as cost reductions in our legacy Gulf of Mexico operations.

Air Medical segment profit was $6.2 million for the quarter ended September 30, 2018, compared to a segment profit of $16.0 million for the quarter ended September 30, 2017. The $9.8 million decrease in profit is primarily attributable to increased employee compensation costs and decreased transports at our existing bases. The decline in transports for existing bases is primarily due to weather-related issues.

Technical Services segment profit was less than $0.1 million for both the quarters ended September 30, 2018 and September 30, 2017.

Unallocated selling, general and administrative costs were $7.9 million for the quarter ended September 30, 2018 compared to $6.8 million for the quarter ended September 30, 2017. The $1.1 million increase was principally attributable to increase in legal and consulting fees.

For additional information, please see (i) the attachments hereto and (ii) Form 10-Q for the quarter ended September 30, 2018 that we filed today with the U.S. Securities and Exchange Commission.

Forward-Looking Statements

Except for historical and factual information, the matters set forth in this release are forward-looking statements as defined by the federal securities laws, and are subject to the “safe harbor” protections thereunder. These forward-looking statements are not guarantees of future results, and are based on our current expectations only, are inherently speculative, and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected, or implied by us if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to our ability to refinance our short-term debt, adverse changes in our access to credit markets, and to the other risks referenced in our filings with the U.S. Securities and Exchange Commission (the “SEC”). For all the reasons set forth above and in our SEC reports, you are cautioned not to place undue reliance upon any of our forward-looking statements included in this release, which speak only as of the date made. We undertake no obligation to publicly update or revise any of our forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise.

PHI provides helicopter transportation and related services to a broad range of customers including the oil and gas and air medical industries, and also provides third-party maintenance services to select customers. PHI Voting Common Stock and Non-Voting Common Stock are traded on The NASDAQ Global Market (symbols PHII and PHIIK).

   

PHI, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Thousands of dollars and shares, except per share data)

(Unaudited)

 
Quarter Ended
September 30,
Nine Months Ended
September 30,
2018   2017 2018   2017
Operating revenues, net $ 168,787 $ 150,167 $ 498,400 $ 431,209
Expenses:
Direct expenses 160,200 136,786 471,509 400,250
Selling, general and administrative expenses 16,255   11,401   46,199   38,691  
Total operating expenses 176,455 148,187 517,708 438,941
(Gain) loss on disposal of assets (4 ) 708 3
Equity in (gain) loss of unconsolidated affiliate, net (118 ) (438 ) (162 ) 1,556  
Operating (loss) income (7,550 ) 2,422 (19,854 ) (9,291 )
Interest expense 8,357 8,027 24,894 24,305
Other income – net (1,845 ) (706 ) (436 ) (2,474 )
6,512   7,321   24,458   21,831  
Loss before income taxes (14,062 ) (4,899 )

(44,312

) (31,122 )
Income tax benefit (2,531 ) (1,622 ) (8,705 ) (9,324 )
Net loss $ (11,531 ) $ (3,277 ) $ (35,607 ) $ (21,798 )
Weighted average shares outstanding:
Basic 15,816 15,799 15,811 15,750
Diluted 15,816 15,799 15,811 15,750
Net loss per share:
Basic $ (0.73 ) $ (0.21 ) $ (2.25 ) $ (1.38 )
Diluted $ (0.73 ) $ (0.21 ) $ (2.25 ) $ (1.38 )
 
 

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Summarized financial information concerning our reportable operating segments for the quarters and nine months ended September 30, 2018 and 2017 is as follows:

  Quarter Ended
September 30,
  Nine Months Ended
September 30,
2018   2017 2018   2017
(Thousands of dollars) (Thousands of dollars)
Segment operating revenues
Oil and Gas $ 93,338 $ 75,700 $ 286,046 $ 222,098
Air Medical 70,192 70,280 194,331 192,840
Technical Services 5,257   4,187   18,023   16,271  
Total operating revenues, net 168,787   150,167   498,400   431,209  
Segment direct expenses
Oil and Gas (1) 94,832 81,467 285,818 236,878
Air Medical 60,358 51,120 170,966 152,363
Technical Services 4,892   3,761   14,563   12,565  
Total direct expenses 160,082 136,348 471,347 401,806
Segment selling, general and administrative expenses
Oil and Gas 4,321 1,148 13,642 4,501
Air Medical 3,666 3,136 10,087 9,280
Technical Services 356   338   1,066   1,032  
Total selling, general and administrative expenses 8,343   4,622   24,795   14,813  
Total segment direct and selling, general and administrative expenses 168,425   140,970   496,142   416,619  
Net segment (loss) profit
Oil and Gas (5,815 ) (6,915 )

(13,414

) (19,281 )
Air Medical 6,168 16,024 13,278 31,197
Technical Services 9   88   2,394   2,674  
Total net segment profit 362 9,197 2,258 14,590
 
Other, net (3) 1,845 710 (272 ) 2,471
Unallocated selling, general and administrative costs (1) (4) (7,912 ) (6,779 ) (21,404 ) (23,878 )
Interest expense (8,357 ) (8,027 ) (24,894 ) (24,305 )
(Loss) earnings before income taxes $ (14,062 ) $ (4,899 ) $ (44,312 ) $ (31,122 )
(1)   Includes equity in (earnings) of unconsolidated affiliates, net.
(2) 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 registered public accounting firm. These financial measures are therefore considered non-GAAP financial measures. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding our results of operations. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:
   
Quarter Ended Nine Months Ended
September 30, September 30,
  2018       2017     2018       2017  
 
Total net segment profit $ 362 $ 9,197 $ 2,258 $ 14,590
Other, net 1,845 710 (272 ) 2,471
Unallocated selling, general and administrative costs (7,912 ) (6,779 ) (21,404 ) (23,878 )
Interest expense   (8,357 )   (8,027 )   (24,894 )   (24,305 )
(Loss) earnings before income taxes $ (14,062 ) $ (4,899 ) $ (44,312 ) $ (31,122 )
(3)   Consists of (gains) losses on disposition of property and equipment and other income.
(4) Represents corporate overhead expenses not allocable to segments.

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PHI, Inc.
Trudy McConnaughhay, 337-235-2452
Chief Financial Officer


Source: Business Wire (November 9, 2018 - 5:31 PM EST)

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