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 July 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 Aug. 31, 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
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, April 30,
1994 1994
___________ ___________
(Unaudited) *
(Thousands of Dollars)
ASSETS
Current Assets:
Cash and cash equivalents $ 4,936 $ 5,452
Accounts receivable - net
of allowance 30,615 27,759
Inventory 25,020 24,850
Prepaid expenses 787 1,446
Refundable income taxes - 196
_______ _______
Total current assets 61,358 59,703
_______ _______
Notes receivable - 290
Investments 1,140 597
Property and equipment:
Cost 193,494 194,810
Less accumulated depreciation (109,774) (109,171)
_______ _______
83,720 85,639
_______ _______
Other assets 99 83
_______ _______
$ 146,317 $ 146,312
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 17,373 $ 15,740
Accrued vacation pay 4,687 4,687
Income taxes payable 166 -
Current portion of long-term debt 8,717 8,704
_______ _______
Total current liabilities 30,943 29,131
_______ _______
Long-term debt 28,881 31,849
Deferred income taxes 10,023 10,023
Stockholders' equity:
Voting common stock 273 273
Non-voting common stock 183 183
Additional paid-in capital 11,027 11,027
Retained earnings 64,987 63,826
_______ _______
76,470 75,309
_______ _______
$ 146,317 $ 146,312
======= =======
*The balance sheet at April 30, 1994 is condensed from the
audited financial statements at that date.
See notes to condensed consolidated financial statements.
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended July 31,
1994 1993
________ ________
(Thousands of dollars,
except per share amounts)
Revenues:
Operating revenues $ 43,557 $ 47,618
Gain on equipment
disposals 772 44
Equity in net earnings
of investee companies 61 15
_______ _______
44,390 47,677
_______ _______
Expenses:
Direct expenses 39,250 42,550
Selling, general and
administrative expenses 2,448 2,424
Interest expense 756 602
_______ _______
42,454 45,576
_______ _______
Earnings before income
taxes 1,936 2,101
Income taxes 775 850
_______ _______
Net earnings $ 1,161 $ 1,251
======= =======
Net earnings per share $ .21 $ .23
======= =======
Weighted average common
shares outstanding 5,478 5,478
======= =======
Dividends paid per common
share $ -0- $ -0-
======= =======
See notes to condensed consolidated financial statements.
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended July 31,
1994 1993
______ ______
(Thousands of Dollars)
Operating activities:
Net earnings $ 1,161 $ 1,251
Depreciation 2,007 1,960
Gain on equipment disposals (772) (44)
Equity in net earnings
of investee companies (61) (15)
Changes in operating assets
and liabilities (289) 1,120
_______ _______
Net cash provided by operating
activities 2,046 4,272
_______ _______
Investing activities:
Purchases of property and
equipment (666) (5,762)
Proceeds from equipment disposals 1,350 45
Other (291) -
_______ _______
Net cash provided (used) by
investing activities 393 (5,717)
_______ _______
Financing activities:
Proceeds from long-term debt 2,000 25,030
Payments on long-term debt (4,955) (21,304)
_______ _______
Net cash provided (used) by
financing activities (2,955) 3,726
_______ _______
Increase (decrease) in cash
and cash equivalents (516) 2,281
Cash and cash equivalents
at beginning of period 5,452 2,309
_______ _______
Cash and cash equivalents
at end of period $ 4,936 $ 4,590
======= =======
See notes to condensed consolidated financial statements.
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PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JULY 31, 1994 AND 1993
(UNAUDITED)
A. These financial statements, except for the April 30, 1994
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 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, 1994 and its accompanying
notes and Management's Discussion and Analysis of Financial
Condition and Results of Operations.
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 typically results in reduced revenues 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. Certain reclassifications have been made to the prior year's
financial statements in order to conform with the classifications
adopted for reporting in 1994.<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a comparison of the first quarter of the
fiscal year ending April 30, 1995 with the comparable period of the
prior fiscal year.
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 aircraft maintenance to outside parties.
RESULTS OF OPERATIONS
Operating revenues decreased $4 million, or 8%, to $43.6
million in the first quarter of fiscal 1995 compared to $47.6
million in the prior year period. The overall decrease was
primarily the result of a 9% decrease in flight hours from 56,997
to 52,072. Declines in domestic oil and gas and maintenance
revenues were partially offset by increases in the Company's
aeromedical and international markets.
Domestic oil and gas revenues declined $5.6 million, or 16%
from $34.6 million to $29 million. The decrease was related to the
loss of four contracts which represented $4.6 million in billings
in the first quarter of fiscal 1994. The remainder of the decrease
is primarily a result of competitive pricing pressures in the Gulf
of Mexico.
Aeromedical revenues increased $1.6 million, or 33% to $6.5
million in fiscal 1995 from $4.9 million in the same period of
fiscal 1994. Aeromedical flight hours increased 24% to 3,754 as
compared to 3,036. The increase is due to the addition of five new
programs and eight new dedicated aircraft during the past 15
months.
International oil and gas revenues increased 39% to $4.3
million from $3.1 million. Flight hours in the Company's interna-
tional markets increased 8% from 4,867 to 5,242. The addition of
two new programs involving two helicopters and one fixed wing
aircraft resulted in the improved revenues.
Other revenues, including maintenance, declined $1.2 million
to $3.8 million from $5 million. The decrease was due to a $1.2
million project in fiscal 1994.
The current quarter's results included a gain on disposal of
equipment of $0.8 million. The gain resulted from the disposition
of four aircraft. No aircraft were disposed of in the first
quarter of last year.
The Company's operating margin declined to 10% for the current
quarter from 11% in the prior year's quarter. Consistent with the
decline in revenues and flight hours, direct operating costs
declined 8% or $3.3 million. The decrease resulted primarily from
<PAGE>
a decline in salaries and benefits of $1.7 million related to a 10%
staff reduction. Cost of sales fell $0.7 million related to the
reduction in maintenance revenues. Fuel expense fell $0.3 million
because of reduced flight hours and a 2% price reduction.
Selling, general and administrative expenses were constant at
$2.4 million with fiscal 1995 including $0.3 million of profession-
al fees associated with the proposed transaction described below.
First quarter interest expense increased to $0.8 million from
$0.6 million. The increase was primarily attributable to rising
interest rates partially offset by a decrease in the average
balance of debt outstanding.
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of the quarter ended July 31, 1994 was
$30.4 million compared to $30.6 million at April 30, 1994, the
Company's fiscal year end. The Company had total long-term debt of
approximately $37.6 million and lease commitments of approximately
$64 million as of July 31, 1994. Stockholders' equity rose $1.2
million to $76.5 million at July 31, 1994. The increase was
generated entirely from operating profits.
Cash decreased $0.5 million during the quarter. Net cash
provided by operations was $2 million. Cash aggregating $0.4
million was provided by investing activities and $3 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, $13.3 million and $11 million at July 31, 1994, under
its present revolving credit and term loan facilities, respective-
ly. Other covenants included in the financing agreement restrict
the amount of dividends, capital expenditures, and investments.
In July 1994, the Company entered into an agreement (the
"Agreement") with American Eurocopter Corporation (AEC) to acquire
up to 25 emergency medical service (EMS) contracts and the related
helicopters and certain other assets that service these contracts
from Rocky Mountain Helicopters (RMH). RMH is presently operating
under Chapter 11 of the U.S. Bankruptcy Code. PHI's agreement with
AEC, one of the largest creditors of RMH, is conditional upon,
among other things, bankruptcy court confirmation of AEC's plan.
RMH has filed its own plan of reorganization and is currently
expected to oppose the AEC plan and the closing of the Agreement.
Management estimates annual revenues associated with the EMS
contracts are $27 million. If these contracts and assets are
ultimately acquired, PHI would pay AEC a portion of the contract
revenues received as reimbursement of the purchase price and assume
certain post closing obligations under the EMS contracts and the
helicopter leases and financing instruments. While the acquisition
of these contracts and assets may have a material impact on future <PAGE>
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operations, management does not believe that such event would have
a materially unfavorable effect on the Company's liquidity or
capital resources.
The Company believes its cash flow from operations in
conjunction with its credit capacity is sufficient to meet its
planned requirements for the forthcoming fiscal year.
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):
Three Months Ended July 31,
1994 1993
______ ______
OPERATIONS
Operating revenues $ 43,557 $ 47,618
Expenses 42,454 45,576
Net earnings 1,161 1,251
Net earnings per share .21 .23
Annualized return on
shareholders' equity 6.1% 6.8%
July 31, 1994 April 30, 1994
_____________ _______________
FINANCIAL SUMMARY
Net working capital $ 30,415 $ 30,572
Net book value of
property and equipment 83,720 85,639
Long-term debt 28,881 31,849
July 31, 1994 April 30, 1994
_____________ ______________
GENERAL STATISTICS
Total flight hours 52,072 56,997
Helicopters 263 266
Employees 1,667 1,697<PAGE>
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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 Exhibit No.
10.1(2) 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 Corpo-
ration and PHI (incorporated by reference to
Exhibit No. 10.1(1) 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 Petro-
leum 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 Exhibit No.
10.3 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 Exhibit No.
10.4 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 Exhibit No.
10.5 to PHI's Report on Form 10-K dated April 30,
1993).
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 Exhibit No.
10.6 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 Exhibit No. 10.4 to PHI's Report on
Form 10-K dated April 30, 1990).
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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 Exhibit
No. 10.8 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 Exhibit No. 10.9 to
PHI's Report on Form 10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H.
Untereker dated June 15, 1992 (incorporated by
reference to Exhibit No. 10.10 to PHI's Report on
Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John H.
Untereker dated April 12, 1993, but effective as
of July 20, 1992 (incorporated by reference to
Exhibit No. 10.11 to PHI's Report on Form 10-K
dated April 30, 1993).
10.12 Asset Purchase Agreement by and among, among
others, Rocky Mountain Helicopters, Inc., Ameri-
can Eurocopter Corporation and PHI (incorporated
by reference to Exhibit No. 10.12 to PHI's Report
on Form 10-K dated April 30, 1994).
(b) The Company filed one report on Form 8-K during
the quarter ended July 31, 1994, dated July 19,
1994 reporting an "Other Event" pursuant to Item
5. No financial statements were filed with such
Form 8-K.
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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.
August 31, 1994 By: Carroll W. Suggs /s/
Carroll W. Suggs
Chairman of the Board
and Chief Executive Officer
August 31, 1994 By: John H. Untereker /s/
John H. Untereker
Vice President and
Chief Financial Officer
