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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its Charter)
Delaware 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5728 JEFFERSON HIGHWAY, P. O. BOX 23502
NEW ORLEANS, LOUISIANA 70183
(Address of principal executive offices)
(Zip Code)
504-733-6790
(Registrant's telephone number, including area code)
_________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO .
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable
date.
Outstanding
Class Feb. 28, 1994
Voting Common Stock(P/V $.08 1/3 P/S) 3,278,068
Non-Voting Common Stock(P/V $.08 1/3 P/S) 2,200,000<PAGE>
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, April 30,
1994 1993
(UNAUDITED) *
(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents $ 4,542 $ 2,309
Accounts receivable - net of
allowance 28,406 30,797
Inventory 25,462 24,592
Prepaid expenses 1,519 2,221
Refundable income taxes - 789
Total current assets 59,929 60,708
Investments 160 158
Property and equipment:
Cost 195,697 185,996
Less accumulated depreciation (109,770) (105,762)
85,927 80,234
Other assets 110 -
$146,126 $141,100
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 19,098 $ 16,214
Accrued vacation pay 4,429 4,525
Income taxes payable 204 -
Current portion of long-term debt 8,692 8,550
Total current liabilities 32,423 29,289
Long-term debt 30,706 30,950
Deferred income taxes 8,885 8,885
Stockholders' equity:
Voting common stock 273 273
Non-voting common stock 183 183
Additional paid-in capital 11,027 11,027
Retained earnings 62,629 60,493
74,112 71,976
$146,126 $141,100
*The balance sheet at April 30, 1993 is condensed from the
audited financial statements at that date.
See notes to condensed consolidated financial statements.<PAGE>
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended Nine Months Ended
January 31, January 31,
1994 1993 1994 1993
(Thousands of dollars, except per share amounts)
Revenues:
Operating revenues $41,635 $42,351 $132,947 $128,894
Gain (loss) on
equipment disposals (152) 1,507 289 2,740
Equity in net earnings
(losses) of investee
companies (1) - 2 (15)
41,482 43,858 133,238 131,619
Expenses:
Direct expenses 38,036 40,732 120,887 119,808
Selling, general and
administrative expenses 2,012 2,210 6,714 7,977
Interest expense 679 503 2,009 1,780
40,727 43,445 129,610 129,565
Earnings before income
taxes 755 413 3,628 2,054
Income taxes 343 150 1,492 731
Net earnings $ 412 $ 263 $ 2,136 $ 1,323
Net earnings per share $ .08 $ .05 $ .39 $ .24
Weighted average common
shares outstanding 5,478 5,478 5,478 5,478
Dividends paid per common
share $ -0- $ -0- $ -0- $ .01
See notes to condensed consolidated financial statements.<PAGE>
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended January 31,
1994 1993
(Thousands of dollars)
Operating activities:
Net earnings $ 2,136 $ 1,323
Depreciation 6,209 7,122
Gain on equipment disposals (289) (2,740)
Equity in net losses (earnings)
of investee companies (2) 15
Changes in operating assets
and liabilities 6,006 5,101
Net cash provided by operating
activities 14,060 10,821
Investing activities:
Purchases of property and
equipment (12,652) (6,785)
Proceeds from equipment disposals 927 6,686
Net cash used by investing
activities (11,725) (99)
Financing activities:
Proceeds from long-term debt 30,280 28,000
Payments on long-term debt (30,382) (40,500)
Dividends paid - (55)
Net cash used by financing
activities (102) (12,555)
Increase (decrease) in cash
and cash equivalents 2,233 (1,833)
Cash and cash equivalents
at beginning of period 2,309 3,003
Cash and cash equivalents
at end of period $ 4,542 $ 1,170
See notes to condensed consolidated financial statements.<PAGE>
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED JANUARY 31, 1994 AND 1993
(UNAUDITED)
A. These consolidated financial statements, except for the
April 30, 1993 condensed balance sheet, have been prepared without
audit in compliance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in the consolidated financial statements have been
condensed or omitted pursuant to such rules and regulations; however, the
Company believes that this information is fairly presented. It is suggested
that these condensed consolidated financial statements should be read in
conjunction with the Company's Annual Report on Form 10-K for the
year ended April 30, 1993 and its accompanying notes and
management's discussion and analysis.
B. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all adjustments,
consisting of only normal, recurring adjustments, necessary to
fairly present the financial results for the interim periods
presented.
C. The Company's financial results, particularly as it relates to
its domestic oil and gas operations, are influenced by seasonal
fluctuations. During the Company's third fiscal quarter, there are
historically more days of adverse weather conditions and fewer hours
of daylight than the other months of the year. Consequently, flight
hours are generally lower during the winter than they are at other
times of the year. This produces a seasonal aspect to the Company's
business and usually results in either losses or substantially
reduced profits from operations during those months. Therefore, the
results of operations for interim periods are not necessarily
indicative of the operating results that may be expected for the
full fiscal year.
D. These financial statements reflect the reclassification of
certain expenses to conform to the current quarter's treatment of
these items.<PAGE>
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following is a comparison of the third quarter and the
first nine months of the fiscal year ending April 30, 1994 with the
comparable periods of the prior fiscal year.
THIRD QUARTER FISCAL 1994 TO FISCAL 1993
The Company is engaged in providing helicopter transportation and
related services. The predominant portion of its revenue is derived from
transporting offshore oil and gas production and drilling workers on a
worldwide basis. The Company also performs helicopter transportation
services for a variety of hospital and medical programs and technical
services to outside parties.
Combined operating revenues declined $0.8 million, or 2%, to $41.6
million compared to $42.4 million for the prior year period. Gulf Coast
revenues declined $1.8 million, or 6%, from $32.5 million in fiscal year 1993
to $30.7 million in the current period. The quarter to quarter decrease
resulted primarily from the loss of two contracts. In spite of the overall
decline in revenue, Gulf Coast flight hours increased 4% to 36,888 evidencing
that competitive pressures have increased and customers are increasingly
sharing aircraft or employing aircraft on a shorter term hourly basis.
Revenues from the Company's activities in aeromedical and international
helicopter transportation each increased from the prior year quarter
while technical services revenue declined. These activities represented 26%
of operating revenues versus 23% for the comparable prior year period. Total
flight hours increased 5% from 44,492 to 46,613 in the current quarter
reflecting an overall improvement in activity levels.
The current quarter results include a loss on equipment disposals of
$0.2 million while the prior year quarter had a $1.5 million gain. The prior
year gain resulted from the disposition of aircraft that were in high demand
in the secondary market, thus generating favorable sales prices.
The Company's operating margin improved from 4% in the prior quarter to
9% in the current period. Direct operating costs decreased by $2.7 million,
or 7%, from $40.7 million to $38 million. The decrease was primarily a
result of a $1 million decrease in repairs and maintenance expense and a $1.1
million decrease in operating taxes.
Selling, general and administrative expenses decreased $0.2 million to
$2 million in the current quarter from $2.2 million in the prior year's
quarter. The decrease is attributable to a $0.3 million reduction in
property taxes.<PAGE>
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Third quarter interest expense increased by $0.2 million from $0.5
million in fiscal year 1993 to $0.7 million in fiscal year 1994. The
increase was a result of higher debt levels combined with an increase in the
average interest rate paid.
FIRST NINE MONTHS FISCAL 1994 TO FIRST NINE MONTHS FISCAL 1993
On a year-to-date basis, the Company's operating revenues increased by
3%, or $4 million, from $128.9 million in the prior year period to $132.9
million. Overall flight hours increased 4% from 148,982 to 155,054. Gulf
Coast revenues were constant at $99 million. Although Gulf Coast revenues
were flat, flight hours were higher evidencing overall rate declines and
other competitive pressures in this market. The Company cannot predict if or
when these trends will abate. Aeromedical and international helicopter
transportation services combined with technical services increased 14% from
$28.3 million to $32.3 million and represented 24% of total revenues compared
to 22% for the prior year.
Equipment disposals declined $2.4 million from $2.7 million to $0.3
million. The decrease is due to fewer aircraft sales in the current year.
The Company's operating margin improved to 9% from 7%. Direct operating
costs increased 1% to $120.9 million from $119.8 million. The increase in
direct costs was consistent with the increase in operating revenues. The
Company's margin improved primarily as a result of lower taxes and the
Company's efforts to contain costs.
Selling, general and administrative expenses declined $1.3 million from
$8 million to $6.7 million. The 16% nine month period to period decrease
resulted from a $1.4 million senior management transition charge in the
second quarter of the prior year.
Year-to-date interest expense increased by $0.2 million from $1.8
million to $2 million. The increase was primarily a result of an increase
in the average balance of debt outstanding. The average interest rate paid
increased and was also a factor.
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LIQUIDITY AND CAPITAL RESOURCES
Working capital as of the quarter ended January 31, 1994 was $27.5
million compared to $31.4 million at April 30, 1993, the Company's fiscal
year end. The Company had total long-term debt of approximately $39.4
million and lease commitments of approximately $68 million as of January 31,
1994. Stockholders' equity rose $2.1 million to $74.1 million at January 31,
1994. The increase was generated entirely from operating profits.
Cash increased $2.2 million during the nine month period. Net cash
provided by operations totalled $14 million. Cash aggregating $11.7
million was used to purchase property and equipment and $0.1 million was used
to reduce long-term debt.
Certain covenants contained in the Company's financing agreement
prohibit the Company from incurring debt above the amount available, $15
million and $9.5 million at January 31, 1994, under its present revolving
credit and term loan facilities, respectively. Other covenants included in
the financing agreement restrict the amount of dividends, capital
expenditures, and investments. The management of the Company believes that
funds being generated internally from operations in conjunction with its
financing arrangements will provide the Company with sufficient working
capital for the ensuing year. The Company believes it is in full compliance
with its loan and other financing agreements.
During the quarter, the Company agreed to acquire up to 28% of the
common stock of Aeroservicios Ranger, C.A., a Venezuelan helicopter
operation, for $1 million in cash, equipment and services. The Company
believes this investment will provide the Company a long-term opportunity to
participate in Venezuela's growing economy.
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RESULTS AT A GLANCE (Unaudited)
The following table provides a summary of critical operating and
financial statistics (thousands of dollars, except per share amounts,
financial ratios and general statistics):
OPERATIONS 1994 1993
Revenues $133,238 $131,619
Expenses 129,610 129,565
Net earnings 2,136 1,323
Net earnings per share .39 .24
FINANCIAL SUMMARY 1994 1993
Net working capital $ 27,507 $ 31,419
Net book value of
property and equipment 85,927 80,234
Long-term debt 30,706 30,950
Return on equity 3.8% 2.5%
GENERAL STATISTICS 1994 1993
Helicopters 257 258
Employees 1,742 1,838
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PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Master Helicopter Lease Agreement dated May 29, 1991
between AT&T Systems Leasing Corporation and PHI
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1992).
10.2 Master Helicopter Lease Agreement dated February 14, 1991
between General Electric Capital Corporation and PHI
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1991).
10.3 Amended and Restated Loan Agreement originally dated
as of January 31, 1986 Amended and Restated in its
entirety as of July 9, 1993 among Petroleum Helicopters,
Inc., Whitney National Bank, First National Bank of
Commerce, NationsBank of Texas, N.A. and NationsBank
of Texas, N.A., as agent (incorporated by reference
to Exhibits to PHI's Report on Form 10-K dated
April 30, 1993.)
10.4 Installment promissory note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,122,441.56, secured
by Aircraft Security Agreement dated June 4, 1993
between PHI and debis Financial Services, Inc.
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1993).
10.5 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured
by Aircraft Security Agreement dated June 4, 1993
between PHI and debis Financial Services, Inc.
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1993).
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10.6 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured
by Aircraft Security Agreement dated June 4, 1993
between PHI and debis Financial Services, Inc.
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan
effective July 1, 1989 (incorporated by reference to
Exhibits to PHI's Report on Form 10-K dated
April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock
Option and Stock Appreciation Rights Plan adopted by
PHI's Board effective May 1, 1992 and approved by the
stockholders of PHI on September 30, 1992 (incorporated
by reference to Exhibits to PHI's Report on Form 10-K
dated April 30, 1993).
10.9 Form of Stock Option Agreement for the Grant of
Non-Qualified Stock Options Under the Petroleum
Helicopters, Inc. 1992 Non-Qualified Stock Option and
Stock Appreciation Rights Plan dated June 2, 1993
between PHI and certain of its key employees
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John Untereker dated
June 15, 1992 (incorporated by reference to Exhibits to
PHI's Report on Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John Untereker dated
April 12, 1993, but effective as of July 20, 1992
(incorporated by reference to Exhibits to PHI's Report
on Form 10-K dated April 30, 1993).
(b) No reports on Form 8-K were filed for the quarter ended
January 31, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Petroleum Helicopters, Inc.
February 28, 1994 By: Carroll W. Suggs /s/
__________________________
Carroll W. Suggs
Chairman of the Board
February 28, 1994 By: John H. Untereker /s/
__________________________
John H. Untereker
Vice President and
Chief Financial Officer
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