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: July 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
P. O. Box 578
Metairie, Louisiana 70004-0578
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 828-3323
Petroleum Helicopters, Inc.
5728 Jefferson Highway
P. O. Box 23502, New Orleans, Louisiana 70183
(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
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 August 28, 1995
Voting Common Stock 2,864,760
Non-Voting Common Stock 2,200,830
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands July 31, April 30,
(Current period unaudited) 1995 1995 (1)
ASSETS
Current assets:
Cash and cash equivalents $ 2,236 $ 2,506
Accounts receivable - net
of allowance 30,328 30,493
Inventory 26,131 25,560
Prepaid expenses 911 989
_______ _______
Total current assets 59,606 59,548
======= =======
Investments 4,971 1,002
Property and equipment: _______ _______
Cost 204,314 200,677
Less accumulated depreciation (115,444) (114,214)
_______ _______
88,870 86,463
_______ _______
Other 116 95
_______ _______
$ 153,563 $ 147,108
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 18,116 $ 16,212
Accrued vacation pay 4,902 4,897
Income taxes payable 1,029 331
Current portion of long-term debt 6,769 8,755
Other 485 747
_______ _______
Total current liabilities 31,301 30,942
_______ _______
Long-term debt 31,863 27,060
Deferred income taxes 12,066 12,066
Other long-term liabilities 1,336 1,333
Shareholders' equity:
Voting common stock 286 286
Non-voting common stock 220 220
Additional paid-in capital 10,118 10,118
Retained earnings 66,373 65,083
_______ _______
76,997 75,707
_______ _______
$ 153,563 $ 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.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
In thousands, except per Three Months Ended July 31,
share amounts 1995 1994
(unaudited) ____ ____
REVENUES:
Operating revenues $ 46,379 $ 43,557
Gain on equipment
disposals 331 772
Equity in net earnings of
investee companies - 61
______ ______
46,710 44,390
______ ______
EXPENSES:
Direct expenses 41,072 39,180
Selling, general and
administrative expenses 2,457 2,518
Interest expense 777 756
______ ______
44,306 42,454
______ ______
Earnings before income
taxes 2,404 1,936
Income taxes 1,013 775
______ ______
Net earnings $ 1,391 $ 1,161
====== ======
Net earnings per share $ 0.27 $ 0.21
====== ======
Weighted average common
shares outstanding 5,065 5,478
====== ======
Dividends paid per common
share $ 0.02 $ -
====== ======
See notes to condensed consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Three Months Ended July 31,
(unaudited) 1995 1994
OPERATING ACTIVITIES:
Net earnings $ 1,391 $ 1,161
Depreciation 1,963 2,007
Gain on equipment disposals (331) (772)
Equity in net earnings
of investee companies - (61)
Changes in operating assets
and liabilities 2,017 (289)
Other 18 -
______ ______
Net cash provided by operating
activities 5,058 2,046
______ ______
INVESTING ACTIVITIES:
Investments (3,967) -
Purchases of property and
equipment (4,436) (666)
Proceeds from equipment disposals 359 1,350
Other - (291)
______ ______
Net cash provided (used) by
investing activities (8,044) 393
______ ______
FINANCING ACTIVITIES:
Proceeds from long-term debt 7,000 2,000
Payments on long-term debt (4,183) (4,955)
Dividends paid (101) -
______ ______
Net cash provided (used) by
financing activities 2,716 (2,955)
______ ______
Decrease in cash
and cash equivalents (270) (516)
Cash and cash equivalents
at beginning of period 2,506 5,452
______ ______
Cash and cash equivalents
at end of period $ 2,236 $ 4,936
====== ======
See notes to condensed consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JULY 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 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. 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 first quarter of the
fiscal year ending April 30, 1996 with the comparable period of the
prior fiscal year.
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 and 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 July 31,
1995 and 1994:
(Thousands of dollars, Revenues for the Quarter Ended July 31,
percentages and flight
hours)
Incr (Decr)
1995 1994 $ %
Domestic Oil and Gas $ 32,092 $ 29,047 $ 3,045 10
Aeromedical Services 6,300 6,507 (207) (3)
International and Technical
Services 7,987 8,003 (16) -
______ ______ _____ __
Total Operating Revenues $ 46,379 $ 43,557 $ 2,822 6
====== ====== ===== ==
Total Flight Hours 55,514 52,072 3,442 7
====== ====== ===== ==
Domestic Oil and Gas
Domestic Oil and Gas revenues for the quarter ended July 31,
1995 were greater than comparable revenues for any quarter since
the quarter ended October 31, 1993. 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 10%
increase in flight hours and enabled the Company to increase its
market share to 52% in the current quarter compared to 47% for the
comparable period in the prior year.
Aeromedical Services
The Company operates 12 programs and a total of 33 aircraft in
the Emergency Medical Service industry. The quarter to quarter
decrease in revenues was primarily attributable to a decrease in
fixed revenues. Although the number of aircraft operated remained
constant, some of the aircraft flown under contract were changed to
smaller and less expensive models.
Direct Expenses
Direct expenses increased $ 1.9 million, or 5%, as a result of
Domestic Oil and Gas Programs activity levels; however, as a
percentage of operating revenues, direct expenses declined by 1.4%
which improved the operating margin to 11.4% for the current
quarter.
Human resource costs accounted for $ 1.3 million of the direct
expense increase. The increase in domestic flight activity,
combined with a slight reduction in the average number of employees
employed, resulted in increased overtime pay and related benefits,
primarily at the Company's bases.
Helicopter expenses rose $ 0.3 million from $ 18.5 million to
$ 18.8 million. Helicopter expenses related to flight activity
including spare parts usage, repairs and maintenance and fuel
increased a combined $ 0.7 million, or 6%, from $ 10.9 million to
$ 11.6 million. These increases were consistent with the increase
in operating revenues. Helicopter insurance costs decreased $ 0.2
million due to the Company's favorable safety record.
Selling, General, and Administrative Expenses
Selling, general and administrative expenses were essentially
constant at $ 2.5 million. Human resource costs increased $ 0.2
million, miscellaneous expenses increased $ 0.1 million and legal
and accounting expenses declined $ 0.3 million.
LIQUIDITY AND CAPITAL RESOURCES
The following is a comparison of the first quarter of the
fiscal year ending April 30, 1996 with the period ending April 30,
1995.
The Company's cash position as of July 31, 1995 was $ 2.2
million compared to $ 2.5 million at April 30, 1995, the Company's
fiscal year end. Working capital remained essentially constant at
$ 28.3 million compared to $ 28.6 million at fiscal year end.
Total long-term debt increased $ 2.8 million to $ 38.6 million
as a result of the investing activities described below. 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. During the first
quarter, the Company paid the first quarter installment and prepaid
the second quarter installment, an aggregate of $ 4.2 million. At
July 31, 1995, the Company had $ 16.2 million and $ 7.9 million of
credit capacity available under its term and revolving credit
facilities, respectively. The Company is in compliance with the
provisions of its loan agreement.
Cash generated from operating activities was $ 5.1 million for
the quarter. During the quarter, the Company utilized its cash
flow for $ 8 million in investing activities and supplemented the
difference with additional borrowings under its credit facility.
Investing activities consisted principally of the purchase of three
aircraft for $ 2.9 million and the acquisition of a 49% interest in
Irish Helicopters Limited for approximately $ 4 million. The
Company also paid a dividend of $ 0.02 per share during the first
quarter of fiscal 1996.
The Company has begun a comprehensive review of all of its
domestic bases for possible fuel contamination resulting from
routine flight operations, and to date the Company has identified
known or suspected fuel contamination at six of its bases.
Although the full extent of contamination has not been determined
and the cost of remediation has not been estimated at any of these
bases, on the basis of this preliminary information a provision of
$ 200,000 was made for remediation costs in its 1995 accounts. The
Company is seeking estimates of remediation costs and will make
additional provisions to the extent necessary as reliable estimates
of 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):
Three Months Ended July 31,
Operations 1995 1994
________ ________
Operating revenues $ 46,379 $43,557
Net earnings 1,391 1,161
Net earnings per share .27 .21
Annualized return on
shareholders' equity 7.3% 6.1%
Total flight hours 55,514 52,072
Financial Summary July 31, 1995 April 30, 1995
_____________ ____________
Net working capital $ 28,304 $28,606
Net book value of
property and equipment 88,870 86,463
Long-term debt 31,863 27,060
General Statistics
Helicopters Operated 252 254
Employees 1,662 1,649
<PAGE>
Part II - OTHER INFORMATION
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
The Company filed a report on Form 8-K dated July 28, 1995
reporting the issuance of a press release on July 28, 1995
under Item 5 thereof.
<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.
September 1, 1995 By: Carroll W. Suggs /s/
Carroll W. Suggs
Chairman of the Board,
President and Chief
Executive Officer
September 1, 1995 By: John H. Untereker /s/
John H. Untereker
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONDENSED FINANCIAL
STATEMENTS FOR THE PERIOD ENDED JULY 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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