United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 1995
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)
Louisiana 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 Airline Highway, Suite 400
Metairie, Louisiana 70001-5979
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 828-3323
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at December 1, 1995
Voting Common Stock 2,864,761
Non-Voting Common Stock 2,200,830
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands October 31, April 30,
(Current period unaudited) 1995 1995 (1)
ASSETS
Current assets:
Cash and cash equivalents $ 2,359 $ 2,506
Accounts receivable - net
of allowance 30,740 30,493
Inventory 25,659 25,560
Prepaid expenses 926 989
Notes receivable 1,370 -
Assets held for sale 361 215
Total current assets 61,415 59,763
Investments 4,135 1,002
Property and equipment:
Cost 202,190 199,816
Less accumulated depreciation (113,710) (113,568)
_______ _______
88,480 86,248
Other 96 95
_______ _______
$ 154,126 $ 147,108
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 19,317 $ 15,224
Accrued vacation pay 4,781 4,897
Income taxes payable 1,616 331
Current portion of long-term debt 8,782 8,755
Other 183 747
_______ _______
Total current liabilities 34,679 29,954
Long-term debt 25,627 27,060
Deferred income taxes 12,066 12,066
Other long-term liabilities 3,050 2,321
Shareholders' equity:
Voting common stock 286 286
Non-voting common stock 220 220
Additional paid-in capital 10,118 10,118
Retained earnings 68,080 65,083
_______ _______
78,704 75,707
$ 154,126 $ 147,108
======= =======
(1)The balance sheet at April 30, 1995 is condensed from
the audited financial statements at that date.
See notes to condensed consolidated financial statements.<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Six Months
In thousands, except per Ended October 31, Ended October 31,
share amounts 1995 1994 1995 1994
(unaudited) ____ ____ ____ ____
REVENUES:
Operating revenues $ 47,901 $ 44,841 $ 94,280 $ 88,398
Gain on equipment
disposals 417 184 748 956
Equity in net earnings of
investee companies 100 20 100 81
______ ______ ______ ______
48,418 45,045 95,128 89,435
______ ______ ______ ______
EXPENSES:
Direct expenses 41,495 39,337 82,567 78,517
Selling, general and
administrative expenses 2,907 2,556 5,364 5,074
Interest expense 758 732 1,535 1,488
______ ______ ______ ______
45,160 42,625 89,466 85,079
______ ______ ______ ______
Earnings before income
taxes 3,258 2,420 5,662 4,356
Income taxes 1,324 965 2,337 1,740
______ ______ ______ ______
Net earnings $ 1,934 $ 1,455 $ 3,325 $ 2,616
====== ====== ====== ======
Net earnings per share $ 0.39 $ 0.27 $ 0.66 $ 0.48
====== ====== ====== ======
Weighted average common
shares outstanding 5,065 5,478 5,065 5,478
====== ====== ====== ======
Dividends paid per common
share $ 0.05 $ 0.02 $ 0.07 $ 0.02
====== ====== ====== ======
See notes to condensed consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Six Months Ended October 31,
(unaudited) 1995 1994
____ ____
OPERATING ACTIVITIES:
Net earnings $ 3,325 $ 2,616
Depreciation 4,026 4,152
Gain on equipment disposals (748) (956)
Equity in net earnings
of investee companies (100) (81)
Changes in operating assets
and liabilities 3,725 484
Other 118 -
______ ______
Net cash provided by operating
activities 10,346 6,215
______ ______
INVESTING ACTIVITIES:
Investments (3,003) -
Purchases of property and
equipment (7,142) (6,348)
Proceeds from equipment disposals 1,413 1,925
______ ______
Net cash used by
investing activities (8,732) (4,423)
______ ______
FINANCING ACTIVITIES:
Proceeds from long-term debt 7,000 4,500
Payments on long-term debt (8,406) (10,130)
Dividends paid (355) (110)
______ ______
Net cash used by
financing activities (1,761) (5,740)
______ ______
Decrease in cash
and cash equivalents (147) (3,948)
Cash and cash equivalents
at beginning of period 2,506 5,452
______ ______
Cash and cash equivalents
at end of period $ 2,359 $ 1,504
====== ======
See notes to condensed consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED OCTOBER 31, 1995 AND 1994
(UNAUDITED)
A. These financial statements, except for the April 30, 1995
condensed consolidated balance sheet, have been prepared
without audit as permitted by 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. These condensed
consolidated financial statements should be read in
conjunction with the financial statements contained in the
Company's Annual Report on Form 10-K for the year
ended April 30, 1995 and the 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 winter, there are 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 Company's third fiscal quarter than
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. Primary earnings per share are computed based on the weighted
average number of shares and dilutive equivalent shares of
common stock (stock options) outstanding during each year
using the treasury stock method.
E. Certain reclassifications have been made to the prior year's
financial statements in order to conform with the
classifications adopted for reporting in fiscal 1996.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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
The following is a comparison of the second quarter and the
first six months of the fiscal year ending April 30, 1996 with the
comparable periods of the prior fiscal year.
Second Quarter Fiscal 1996 to Fiscal 1995
Revenues
The Company generates revenues from both ongoing service
contracts with established customers and non-contract flights
referred to as Specials. Domestic Oil and Gas contracts are
generally on a month to month basis and consist of a fixed fee plus
an hourly charge for actual flight time. Specials are customer
flights, primarily domestic oil and gas, provided on an as needed
basis that are not provided pursuant to ongoing contracts and which
generally carry higher rates.
International and aeromedical contracts also provide for fixed
and hourly charges, but are generally for longer terms. These
contracts impose early cancellation fees to encourage customers to
fulfill the contract term and cover the Company's additional
upfront costs in the event of early termination.
The following table summarizes and compares the Company's
revenues by certain market segments for the quarters ended October
31, 1995 and 1994:
(Thousands of dollars, Revenues for the Quarter
except percentages and Ended October 31,
flight hours)
Incr (Decr)
1995 1994 $ %
____ ____ ___ ___
Domestic Oil and Gas $34,054 $30,122 $ 3,932 13
Aeromedical Services 6,576 6,379 197 3
International and
Technical Services 7,271 8,340 (1,069) (13)
______ ______ ______
Total Operating Revenues $47,901 $44,841 $ 3,060 7
====== ====== ====== =
Total Flight Hours 56,243 52,821 3,422 6
====== ====== ====== =
<PAGE>
Domestic Oil and Gas
Domestic Oil and Gas revenues increased $ 3.9 million, or 13%,
to $ 34.1 million for the quarter. The Company attributes this
increase to increased flight activity due to hurricane evacuations
and better economic conditions in the Gulf of Mexico. When a
hurricane threatens portions of the Gulf of Mexico, the Company
evacuates customer personnel which causes a short-term increase in
flight hours. As of October 31, 1995, the Company had 13 more
aircraft under contract and 12 more contracts than last year at
October 31, 1994. These factors produced a 9% increase in domestic
flight hours.
Aeromedical Services
The Company operates 12 programs and a total of 33 aircraft in
the Aeromedical Services market. Aeromedical Services revenue
increased $ 0.2 million, or 3%, to $ 6.6 million. Aeromedical flight
hours decreased 2% to 3,344 for the quarter. The increase in revenue
is due primarily to a slight upward adjustment in contract rates, an
additional dedicated aircraft for an existing customer, and a change
of an aircraft under contract to a more expensive model. The Company
was recently awarded one new contract which will commence operations
in the current fiscal year.
International and Technical Services
International oil and gas revenues declined $ 0.8 million, or
17%, to $ 3.7 million. International flight hours decreased 4% to
4,984. The decrease in revenue and flight hours is due primarily to
the cessation of one non-recurring contract which included six
dedicated aircraft.
The decline in technical services and other revenues was also
attributable to this contract. Other revenues declined $ 0.3 million
to $ 3.5 million from $ 3.8 million.
Direct Expenses
Direct expenses rose $ 2.2 million, or 6%, due primarily to an
increase of $ 2.6 million or 15% in flight related expenses related
to increased flight activity in the Company's Domestic Oil and Gas
Programs. These increased costs were partially offset by a decrease
in employee benefits of $ 0.6 million, or 16%.
The increase in flight related expenses was primarily comprised
of increases in spare parts usage, repairs and maintenance, and fuel
expenses of an aggregate $ 1.9 million, or 19%, from $ 9.9 million to
$ 11.7 million, and an increase in helicopter rent expense of $ 0.4
million to $ 3.1 million.
As more fully described in Liquidity and Capital Resources, the
Company increased its environmental expense reserve from $ 0.2
million to $ 1 million.
<PAGE>
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased by $ 0.3
million to $ 2.9 million for the quarter. Human resources increased
$ 0.2 million related to increased benefits. Computer consulting
fees increased $ 0.1 million as the Company began the process of
installing a new computer system; these fees and other related costs
will continue for at least the next 36 months.
First Six Months Fiscal 1996 to First Six Months Fiscal 1995
The following table summarizes and compares the Company's revenues by
certain market segments for the six months ended October 31, 1995 and
1994:
Revenues
(Thousands of dollars, Revenues for the Six Months
except percentages and Ended October 31,
flight hours)
Incr (Decr)
1995 1994 $ %
____ ____ ___ ___
Domestic Oil and Gas $66,146 $59,169 $ 6,977 12
Aeromedical Services 12,876 12,886 (10) -
International and
Technical Services 15,258 16,343 (1,085) (7)
______ ______ ______
Total Operating Revenues $94,280 $88,398 $ 5,882 7
====== ====== ====== =
Total Flight Hours 111,757 104,893 6,864 7
======= ======= ====== =
Domestic Oil and Gas
The first six months Domestic Oil and Gas revenues were higher
than last fiscal year's comparable period due to increasing activity
by the oil and gas industry in the Gulf of Mexico and hurricane
evacuations. The Company attributes the increase to better economic
conditions in the Gulf of Mexico - a result of stable oil prices,
combined with improved technology for deep water extraction - and one
of the Company's competitors ceasing its flight operations. These
factors produced a 9% increase in Domestic Oil and Gas flight hours
and enabled the Company to increase its market share to 52% compared
to 47% for the comparable period in the prior year.
International and Technical Services
The decline in International and Technical Services revenues is
attributable to a three month temporary contract in the second
quarter of fiscal 1995. This contract produced $ 0.9 million in
International revenues including $ 0.7 million in flight revenues and
$ 0.2 million in other revenues.
<PAGE>
Gain on Equipment Disposals
Gain on equipment disposals decreased $ 0.3 million as the
Company disposed of two aircraft in the current period compared to
six for the prior year period.
Direct Expenses
Direct expenses increased in response to the increase in flight
activity; however, the Company's operating margin improved from 11%
in fiscal 1995 to 12% in the current period - a 9% increase.
Of direct expenses, flight related expenses increased $ 2.8
million, or 8%, from $ 35.4 million to $ 38.2 million, represented
primarily by an increase of $ 2.2 million in spare parts used and
repairs and maintenance. Fuel expense also increased $ 0.3 million
and helicopter rent increased $ 0.4 million to $ 3.4 million and $
6.2 million, respectively.
Human resources costs also increased $ 0.4 million from $ 33.2
million to $ 33.6 million. The increase was primarily related to an
increase in overtime resulting from the increase in flight hours.
As more fully described below, the Company increased its
environmental expense reserve from $ 0.2 million to $ 1 million.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased $ 0.3
million from $ 5.1 million to $ 5.4 million. Human resources
increased $ 0.3 million related to an increase in benefits of $ 0.2
million and an increase in overtime of $ 0.1 million.
LIQUIDITY AND CAPITAL RESOURCES
The following is a comparison of the first six months of the
fiscal year ending April 30, 1996 with the period ending April 30,
1995.
The Company's cash position as of October 31, 1995 was $ 2.4
million compared to $ 2.5 million at April 30, 1995, the Company's
fiscal year end. Working capital declined $ 3.1 million from $ 29.8
million at fiscal year end to $ 26.7 million. The decline was
primarily related to an increase in accounts payable and accrued
expenses of $ 4.1 million offset by an increase in notes receivable
from affiliates of $ 1.4 million. The increase in accounts payable
and accrued expenses is consistent with the increase in operating
activity and reflects the seasonal aspect of the business.
Total long-term debt decreased $ 1.4 million to $ 34.4 million.
The Company's current debt obligation for fiscal 1996 totals $ 8.8
million, due in equal quarterly installments, which the Company
intends to pay with cash flow from operations. At October 31, 1995,
the Company had $ 14.5 million and $ 13.7 million of credit capacity
available under its term and revolving credit facility, respectively.
The Company is in compliance with the provisions of its loan
agreement.
<PAGE>
Cash generated from operating activities was $ 10.3 million.
The Company utilized its cash flow for $ 8.7 million in investing
activities and to reduce long-term debt by $ 1.4 million. Investing
activities included the purchase of five aircraft for $ 4.3 million
and the acquisition of a 49% interest in Irish Helicopters Limited
for approximately $ 3 million. The Company also paid dividends
totalling $ 0.07 per share.
In the first quarter of fiscal 1996 the Company began an
environmental review at selected domestic bases. Based on this
review, known or suspected fuel contamination has been identified at
seven of its bases. Management now believes it is possible that
similar fuel contamination will be found at additional bases.
During the current quarter, initial assessments of the costs to
remediate this contamination were commenced and a preliminary
estimate of the costs expected to be incurred at one of the Company's
bases was received. The Company is seeking additional information
regarding this preliminary estimate, and further assessments are
planned at all other bases at which known or suspected fuel
contamination has been identified. Depending in part upon the
results of these assessments, the Company also anticipates that it
will conduct additional studies at its other bases. Based on the
information currently available to management, an additional
provision of $ 750,000 has been made in the current quarter,
resulting in an aggregate reserve for environmental related costs of
$ 950,000. The Company will make additional provisions in future
periods to the extent appropriate as further information regarding
these costs become available.
<PAGE>
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, flight hours and general statistics):
Six Months Ended October 31,
Operations 1995 1994
____ ____
Operating revenues $ 94,280 $ 88,398
Net earnings 3,325 2,616
Net earnings per share .66 .48
Annualized return on
shareholders' equity 8.6% 6.8%
Total flight hours 111,757 104,893
Financial Summary October 31, 1995 April 30, 1995
________________ ______________
Net working capital $ 26,736 $29,809
Net book value of
property and equipment 88,480 86,248
Long-term debt 25,627 27,060
General Statistics
Helicopters Operated 252 254
Employees 1,648 1,649
<PAGE>
Part II - OTHER INFORMATION
Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of the stockholders of the Company was held
on September 22, 1995, at which time the following matters were
submitted to a vote to stockholders:
(a) The election of the following to the Board of Directors:
Nominees For Withheld
________ ___ ________
Carroll W. Suggs 2,582,673 1,450
Leonard M. Horner 2,584,031 92
Robert E. Perdue 2,584,115 8
Robert G. Lambert 2,584,123 0
(b) A proposal to adopt the PHI 1995 Incentive Compensation
Plan was approved by the following vote:
2,301,845 for, 119,451 against, and 11,641 abstained.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 (i) Articles of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1(i) to PHI's Report on
Form 10-Q for the quarterly period ended October 31,
1994).
(ii) By-laws of the Company (incorporated by reference to
Exhibit No. 3.1(ii) to PHI's Report on Form 10-Q for the
quarterly period ended October 31, 1994).
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ending
October 31, 1995.<PAGE>
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.
December 4, 1995 By: Carroll W. Suggs /s/
____________________
Carroll W. Suggs
Chairman of the Board,
President and Chief
Executive Officer
(duly authorized officer)
December 4, 1995 By: John H. Untereker /s/
_____________________
John H. Untereker
Vice President and
Chief Financial Officer
(principal financial
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONDENSED FINANCIAL
STATEMENTS FOR THE PERIOD ENDED OCTOBER 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<S> <C>
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<PERIOD-END> OCT-31-1995
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<INVENTORY> 25,659
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<PP&E> 202,190
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<CURRENT-LIABILITIES> 34,679
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<COMMON> 506
0
0
<OTHER-SE> 78,198
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<SALES> 94,280
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<CGS> 82,567
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</TABLE>
