SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 1999
|_| Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period _____ to _____
Commission File Number 0-5232
OFFSHORE LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 72-0679819
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
224 RUE DE JEAN
P. O. BOX 5C, LAFAYETTE, LOUISIANA 70505
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (337) 233-1221
(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, and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate the number shares outstanding of each of the issuer's classes
of Common Stock, as of September 30, 1999.
21,103,421 shares of Common Stock, $.01 par value
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue......................................... $ 104,977 $ 128,162 $ 211,395 $ 245,435
Gain on disposal of equipment............................. 565 1,006 1,527 1,286
----------- ----------- ----------- -----------
105,542 129,168 212,922 246,721
OPERATING EXPENSES
Direct cost............................................... 87,902 95,525 172,786 185,494
Depreciation and amortization............................. 8,391 8,506 16,575 16,984
General and administrative................................ 7,302 7,645 14,112 13,929
----------- ----------- ----------- -----------
103,595 111,676 203,473 216,407
----------- ----------- ----------- -----------
OPERATING INCOME.......................................... 1,947 17,492 9,449 30,314
Earnings from unconsolidated entities..................... 1,085 1,505 2,187 2,605
Interest income........................................... 730 801 1,734 1,690
Interest expense.......................................... 4,726 5,024 9,396 10,037
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE PROVISION (BENEFIT)
FOR INCOME TAXES....................................... (964) 14,774 3,974 24,572
Provision (benefit) for income taxes...................... (296) 4,435 1,235 7,374
Minority interest......................................... (387) (323) (709) (629)
----------- ----------- ----------- -----------
NET INCOME (LOSS)......................................... $ (1,055) $ 10,016 $ 2,030 $ 16,569
=========== =========== =========== ===========
Net income (loss) per common share:
Basic..................................................... $ (0.05) $ 0.46 $ 0.10 $ 0.76
========== =========== =========== ===========
Diluted................................................... $ (0.05) $ 0.43 $ 0.10 $ 0.71
========== =========== =========== ===========
</TABLE>
2
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1999 1999
--------------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...................................................$ 34,462 $ 70,594
Accounts receivable......................................................... 97,983 89,077
Inventories................................................................. 80,703 82,853
Prepaid expenses............................................................ 6,807 5,999
--------------- ------------
Total current assets..................................................... 219,955 248,523
Investments in unconsolidated entities.......................................... 12,285 9,998
Property and equipment - at cost:
Land and buildings.......................................................... 10,805 10,860
Aircraft and equipment...................................................... 592,506 554,852
--------------- ------------
603,311 565,712
Less: accumulated depreciation and amortization................................ (136,036) (122,796)
--------------- ------------
467,275 442,916
Other assets.................................................................... 39,714 30,593
--------------- ------------
$ 739,229 $ 732,030
=============== ============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable............................................................$ 37,808 $ 35,534
Accrued liabilities......................................................... 39,988 42,395
Deferred taxes.............................................................. 18,045 17,697
Current maturities of long-term debt........................................ 10,291 10,037
--------------- ------------
Total current liabilities................................................ 106,132 105,663
Long-term debt, less current maturities......................................... 229,932 233,615
Other liabilities and deferred credits.......................................... 3,813 3,000
Deferred taxes.................................................................. 96,280 94,908
Minority interest............................................................... 11,601 10,716
Stockholders' Investment:
Common Stock, $.01 par value, authorized 35,000,000 shares; outstanding
21,103,421 at September 30 and March 31
(exclusive of 1,281,050 treasury shares)................................. 211 211
Additional paid-in capital.................................................. 116,053 116,053
Retained earnings........................................................... 175,144 173,114
Accumulated other comprehensive income (loss)............................... 63 (5,250)
--------------- ------------
291,471 284,128
--------------- ------------
$ 739,229 $ 732,030
=============== ============
</TABLE>
3
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1999 1998
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income....................................................................$ 2,030 $ 16,569
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization................................................. 16,575 16,984
Increase in deferred taxes.................................................... 229 4,529
Gain on asset dispositions.................................................... (1,527) (1,286)
Equity in earnings from unconsolidated entities
over dividends received.................................................... (2,223) (962)
Minority interest in earnings................................................. 709 629
Increase in accounts receivable............................................... (7,582) (17,516)
(Increase) decrease in inventories............................................ 3,022 (4,276)
Increase in prepaid expenses and other........................................ (10,440) (1,604)
Increase in accounts payable.................................................. 1,603 6,113
Increase (decrease) in accrued liabilities.................................... (3,146) 3,128
Increase in other liabilities and deferred credits............................ 813 906
------------- ------------
Net cash provided by operating activities......................................... 63 23,214
------------- ------------
Cash flows from investing activities:
Capital expenditures.......................................................... (39,175) (14,185)
Proceeds from asset dispositions.............................................. 6,844 2,481
------------- ------------
Net cash used in investing activities............................................. (32,331) (11,704)
------------- ------------
Cash flows from financing activities:
Repayment of debt............................................................. (4,078) (7,106)
Repurchase of common stock.................................................... -- (3,888)
Issuance of common stock...................................................... -- 39
------------- ------------
Net cash used in financing activities............................................. (4,078) (10,955)
------------- ------------
Effect of exchange rate changes in cash........................................... 214 (296)
------------- ------------
Net increase (decrease) in cash and cash equivalents.............................. (36,132) 259
Cash and cash equivalents at beginning of period.................................. 70,594 56,076
------------- ------------
Cash and cash equivalents at end of quarter.......................................$ 34,462 $ 56,335
============= ============
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest......................................................................$ 9,365 $ 9,563
Income taxes..................................................................$ 3,042 $ 2,181
</TABLE>
4
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles. In the opinion of management, any adjustments
considered necessary for a fair presentation have been included. Operating
results for the six months ended September 30, 1999, are not necessarily
indicative of the results that may be expected for the year ending March 31,
2000. For further information, refer to the consolidated financial statements
and footnotes included in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1999.
NOTE B - EARNINGS PER SHARE
Basic earnings per common share were computed by dividing net income by
the weighted average number of shares of common stock outstanding during the
year. Diluted earnings per share for the three and six months ended September
30, 1999 excluded 3,976,928 shares related to the convertible debt and 843,000
and 903,471 stock options, respectively, at a weighted average exercise price of
$15.07 and $14.69, respectively, which were outstanding during the periods but
were anti-dilutive. Diluted earnings per common share for the three and six
months ended September 30, 1998 were determined on the assumptions that the
convertible debt was converted on April 1, 1997. Diluted earnings per share for
the three and six months ended September 30, 1998 excluded 485,000 and 242,500
stock options, respectively, at a weighted average exercise price of $17.34,
which were outstanding during the periods but were anti-dilutive. The following
table sets forth the computation of basic and diluted net income (loss) per
share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Income (Loss) (thousands of dollars):
Income (Loss) available to common stockholders............. $ (1,055) $ 10,016 $ 2,030 $ 16,569
Interest on convertible debt, net of taxes................. -- 1,008 -- 2,037
------------ ------------ ------------ -------------
Income (Loss) available to common stockholders,
plus assumed conversions.............................. $ (1,055) $ 11,024 $ 2,030 $ 18,606
============ ============ ============ =============
Shares:
Weighted average number of common
shares outstanding......................................... 21,103,421 21,699,312 21,103,421 21,776,574
Options.................................................... -- 25,267 14,854 99,141
Convertible debt........................................... -- 4,195,522 -- 4,240,772
------------ ------------ ------------ -------------
Weighted average number of common
shares outstanding, plus assumed conversions.......... 21,103,421 25,920,101 21,118,275 26,116,487
============ ============ ============ =============
Net Income (Loss) per share:
Basic...................................................... $ (0.05) $ 0.46 $ 0.10 $ 0.76
=========== ============ ============ ============
Diluted.................................................... $ (0.05) $ 0.43 $ 0.10 $ 0.71
=========== ============ ============ ============
</TABLE>
5
<PAGE>
NOTE C - COMMITMENTS AND CONTINGENCIES
In January 1998, the Office and Professional Employees International
Union ("OPEIU") petitioned the National Mediation Board ("NMB") to organize the
Company's domestic mechanics and ground support personnel. Certain objections to
this petition were filed and the NMB dismissed the OPEIU application on May 12,
1998. Under the Federal labor law rules, the union is prohibited from
petitioning the NMB for one year from date of dismissal. In October 1999,
organizing efforts again were initiated, however, to date, no subsequent
petitions have been filed with the NMB. The Company does not believe that these
potential organizing efforts will place it at a disadvantage with its
competitors as management believes that pay scales and work rules will continue
to be similar throughout the industry.
NOTE D - COMPREHENSIVE INCOME
In 1998, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income". SFAS No. 130 requires an entity to report and
display comprehensive income and its components. Comprehensive income is as
follows (thousands of dollars):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ---------------------
1999 1998 1999 1998
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net Income (Loss).............................................. $ (1,055) $ 10,016 $ 2,030 $ 16,569
Other Comprehensive Income:
Currency translation adjustment............................ 11,804 4,968 5,313 4,380
---------- ---------- --------- ----------
Comprehensive Income........................................... $ 10,749 $ 14,984 $ 7,343 $ 20,949
========== ========== ========= ==========
</TABLE>
NOTE E - DERIVATIVE FINANCIAL INSTRUMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Changes in a derivative's
fair value are to be recognized currently in earnings unless specific hedge
accounting criteria are met. The Company will be required to adopt SFAS No. 133
no later than April 1, 2001. The Company has not yet quantified the impact on
its financial statements that may result from adoption of SFAS No. 133, however,
the Company does not use derivative instruments or hedging activities
extensively in its business.
6
<PAGE>
NOTE F - SEGMENT INFORMATION
The Company has adopted SFAS No. 131, "Disclosures about Segments of An
Enterprise and Related Information", which requires that companies disclose
segment data based on how management makes decisions about allocating resources
to segments and measuring their performance. The Company operates principally in
two business segments: Helicopter activities and Production management and
related services. The following shows reportable segment information for the
three and six months ended September 30, 1999 and 1998, reconciled to
consolidated totals, and prepared on the same basis as the Company's
consolidated financial statements (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Segment operating revenue from external customers:
Helicopter activities..................................... $ 95,434 $ 118,247 $ 192,195 $ 223,980
Production management and related services................ 9,503 9,913 19,001 21,446
----------- ----------- ----------- -----------
Total segment operating revenue....................... $ 104,937 $ 128,160 $ 211,196 $ 245,426
=========== =========== =========== ===========
Intersegment operating revenue:
Helicopter activities..................................... $ 674 $ 711 $ 1,328 $ 1,660
Production management and related services................ -- -- -- --
----------- ----------- ----------- -----------
Total intersegment operating revenue.................. $ 674 $ 711 $ 1,328 $ 1,660
=========== =========== =========== ===========
Consolidated operating revenue reconciliation:
Helicopter activities..................................... $ 96,108 $ 118,958 $ 193,523 $ 225,640
Production management and related services................ 9,503 9,913 19,001 21,446
Intersegment eliminations................................. (674) (711) (1,328) (1,660)
Corporate................................................. 40 2 199 9
----------- ----------- ----------- -----------
Total consolidated operating revenue.................. $ 104,977 $ 128,162 $ 211,395 $ 245,435
=========== =========== =========== ===========
Consolidated operating income reconciliation:
Helicopter activities..................................... $ 962 $ 16,780 $ 7,026 $ 29,017
Production management and related services................ 582 632 1,149 1,440
----------- ----------- ----------- -----------
Total segment operating income........................ 1,544 17,412 8,175 30,457
Gain on disposal of equipment............................. 565 1,006 1,527 1,286
Corporate................................................. (162) (926) (253) (1,429)
----------- ----------- ----------- -----------
Total consolidated operating income................... $ 1,947 $ 17,492 $ 9,449 $ 30,314
=========== =========== =========== ===========
</TABLE>
7
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
In connection with the sale of the Company's $100 million 7 7/8% Senior
Notes due 2008, certain of the Company's subsidiaries (the "Guarantor
Subsidiaries") jointly, severally and unconditionally guaranteed the payment
obligations under the Senior Notes. The following supplemental financial
information sets forth, on a consolidating basis, the balance sheet, statement
of income and cash flow information for Offshore Logistics, Inc. ("Parent
Company Only"), for the Guarantor Subsidiaries and for Offshore Logistics,
Inc.'s other subsidiaries (the "Non-Guarantor Subsidiaries"). The Company has
not presented separate financial statements and other disclosures concerning the
Guarantor Subsidiaries because management has determined that such information
is not material to investors.
The supplemental condensed consolidating financial information has been
prepared pursuant to the rules and regulations for condensed financial
information and does not include all disclosures included in annual financial
statements, although the Company believes that the disclosures made are adequate
to make the information presented not misleading. Certain reclassifications were
made to conform all of the financial information to the financial presentation
on a consolidated basis. The principal eliminating entries eliminate investments
in subsidiaries, intercompany balances and intercompany revenues and expenses.
The allocation of the consolidated income tax provision was made using
the with and without allocation method.
8
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...............$ 15,099 $ 2,772 $ 16,591 $ -- $ 34,462
Accounts receivable..................... 377 24,983 74,082 (1,459) 97,983
Inventories............................. -- 35,878 44,825 -- 80,703
Prepaid expenses........................ 182 854 5,771 -- 6,807
----------- ----------- ----------- ----------- -------------
Total current assets.................. 15,658 64,487 141,269 (1,459) 219,955
Intercompany investment................... 199,763 -- -- (199,763) --
Investments in unconsolidated entities.... 1,108 229 10,948 -- 12,285
Intercompany note receivables............. 282,505 -- -- (282,505) --
Property and equipment--at cost:
Land and buildings...................... -- 3,220 7,585 -- 10,805
Aircraft and equipment.................. 3,704 154,896 433,906 -- 592,506
----------- ----------- ----------- ----------- -------------
3,704 158,116 441,491 -- 603,311
Less: Accumulated depreciation
and amortization...................... (2,808) (75,038) (58,190) -- (136,036)
----------- ----------- ----------- ----------- -------------
896 83,078 383,301 -- 467,275
Other assets.............................. 12,578 17,440 9,585 111 39,714
----------- ----------- ----------- ----------- -------------
$ 512,508 $ 165,234 $ 545,103 $ (483,616) $ 739,229
=========== =========== =========== =========== =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable........................$ 190 $ 5,572 $ 35,613 $ (3,567) $ 37,808
Accrued liabilities..................... 6,254 10,821 23,019 (106) 39,988
Deferred taxes.......................... -- -- 18,045 -- 18,045
Current maturities of long-term debt.... -- -- 10,291 -- 10,291
----------- ----------- ----------- ----------- -------------
Total current liabilities............. 6,444 16,393 86,968 (3,673) 106,132
Long-term debt, less current maturities... 190,922 -- 39,010 -- 229,932
Intercompany notes payable................ 3,844 4,224 272,222 (280,290) --
Other liabilities and deferred credits.... 4 2,364 1,445 -- 3,813
Deferred taxes............................ 7,716 30,537 58,027 -- 96,280
Minority interest......................... 11,601 -- -- -- 11,601
Stockholders' investment:
Common stock............................ 211 4,048 1,384 (5,432) 211
Additional paid in capital.............. 116,053 54,567 18,039 (72,606) 116,053
Retained earnings....................... 175,144 53,101 67,871 (120,972) 175,144
Accumulated other comprehensive
income (loss)......................... 569 -- 137 (643) 63
----------- ----------- ----------- ----------- -------------
291,977 111,716 87,431 (199,653) 291,471
----------- ----------- ----------- ----------- -------------
$ 512,508 $ 165,234 $ 545,103 $ (483,616) $ 739,229
=========== =========== =========== =========== =============
</TABLE>
9
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
SIX MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue...........................$ 200 $ 64,551 $ 146,644 $ -- $ 211,395
Intercompany revenue........................ -- 3,833 156 (3,989) --
Gain on disposal of equipment............... 4 1,211 312 -- 1,527
----------- ----------- ----------- ----------- -------------
204 69,595 147,112 (3,989) 212,922
OPERATING EXPENSES
Direct cost................................. 1 52,613 120,172 -- 172,786
Intercompany expense........................ -- 156 3,833 (3,989) --
Depreciation and amortization............... 85 5,009 11,481 -- 16,575
General and administrative.................. 2,942 2,970 8,200 -- 14,112
----------- ----------- ----------- ----------- -------------
3,028 60,748 143,686 (3,989) 203,473
----------- ----------- ----------- ----------- -------------
OPERATING INCOME (LOSS)..................... (2,824) 8,847 3,426 -- 9,449
Earnings from unconsolidated entities....... (693) -- 2,188 692 2,187
Interest income............................. 14,614 207 718 (13,805) 1,734
Interest expense............................ 7,206 -- 15,995 (13,805) 9,396
----------- ----------- ----------- ----------- -------------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES................ 3,891 9,054 (9,663) 692 3,974
Allocation of consolidated income taxes..... 1,204 3,023 (2,992) -- 1,235
Minority interest........................... (657) -- (52) -- (709)
----------- ----------- ----------- ----------- -------------
NET INCOME (LOSS)...........................$ 2,030 $ 6,031 $ (6,723) $ 692 $ 2,030
=========== =========== =========== =========== =============
</TABLE>
10
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities......................$ (8,994) $ 1,625 $ 21,752 $ (14,320) $ 63
----------- ----------- ----------- ----------- -------------
Cash flows from investing activities:
Capital expenditures...................... (130) (8,127) (30,918) -- (39,175)
Proceeds from asset dispositions.......... 17 2,441 4,386 -- 6,844
Investments in subsidiaries............... 3,751 (3,751) -- -- --
----------- ----------- ----------- ----------- -------------
Net cash provided by (used in)
investing activities...................... 3,638 (9,437) (26,532) -- (32,331)
----------- ----------- ----------- ----------- -------------
Cash flows from financing activities:
Repayment of debt......................... (14,320) -- (4,078) 14,320 (4,078)
----------- ----------- ----------- ----------- -------------
Net cash used in financing activities....... (14,320) -- (4,078) 14,320 (4,078)
----------- ----------- ----------- ----------- -------------
Effect of exchange rate changes in cash..... -- -- 214 -- 214
----------- ----------- ----------- ----------- -------------
Net increase (decrease) in cash and
cash equivalents.......................... (19,676) (7,812) (8,644) -- (36,132)
Cash and cash equivalents
at beginning of period.................... 34,775 10,584 25,235 -- 70,594
----------- ----------- ----------- ----------- -------------
Cash and cash equivalents
at end of period.........................$ 15,099 $ 2,772 $ 16,591 $ -- $ 34,462
=========== =========== =========== =========== =============
</TABLE>
11
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 1999
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...............$ 34,775 $ 10,584 $ 25,235 $ -- $ 70,594
Accounts receivable..................... 3,792 20,752 67,499 (2,966) 89,077
Inventories............................. -- 36,621 46,232 -- 82,853
Prepaid expenses........................ 220 577 5,202 -- 5,999
----------- ----------- ----------- ----------- -------------
Total current assets.................. 38,787 68,534 144,168 (2,966) 248,523
Intercompany investment................... 220,575 -- -- (220,575) --
Investments in unconsolidated entities.... 1,108 229 8,661 -- 9,998
Intercompany note receivables............. 233,444 3,015 86 (236,545) --
Property and equipment--at cost:
Land and buildings...................... -- 3,220 7,640 -- 10,860
Aircraft and equipment.................. 3,630 149,544 401,678 -- 554,852
----------- ----------- ----------- ----------- -------------
3,630 152,764 409,318 -- 565,712
Less: Accumulated depreciation
and amortization...................... (2,772) (72,292) (47,732) -- (122,796)
----------- ----------- ----------- ----------- -------------
858 80,472 361,586 -- 442,916
Other assets.............................. 12,607 18,200 (325) 111 30,593
----------- ----------- ----------- ----------- -------------
$ 507,379 $ 170,450 $ 514,176 $ (459,975) $ 732,030
=========== =========== =========== =========== =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable........................$ 148 $ 4,378 $ 33,764 $ (2,756) $ 35,534
Accrued liabilities..................... 7,033 11,171 24,620 (429) 42,395
Deferred taxes.......................... -- -- 17,697 -- 17,697
Current maturities of long-term debt.... -- -- 10,037 -- 10,037
----------- ----------- ----------- ----------- -------------
Total current liabilities............. 7,181 15,549 86,118 (3,185) 105,663
Long-term debt, less current maturities... 190,922 -- 42,693 -- 233,615
Intercompany notes payable................ 6,364 -- 229,962 (236,326) --
Other liabilities and deferred credits.... 4 2,364 632 -- 3,000
Deferred taxes............................ 907 32,815 61,186 -- 94,908
Minority interest......................... 10,716 -- -- -- 10,716
Stockholders' investment:
Common stock............................ 211 4,048 1,384 (5,432) 211
Additional paid in capital.............. 116,053 58,318 16,800 (75,118) 116,053
Retained earnings....................... 173,114 57,356 78,628 (135,984) 173,114
Accumulated other comprehensive
income (loss)......................... 1,907 -- (3,227) (3,930) (5,250)
----------- ----------- ----------- ----------- -------------
291,285 119,722 93,585 (220,464) 284,128
----------- ----------- ----------- ----------- -------------
$ 507,379 $ 170,450 $ 514,176 $ (459,975) $ 732,030
=========== =========== =========== =========== =============
</TABLE>
12
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue...........................$ 5 $ 75,535 $ 169,895 $ -- $ 245,435
Intercompany revenue........................ -- 5,412 345 (5,757) --
Gain on disposal of equipment............... 3 84 1,199 -- 1,286
----------- ----------- ----------- ----------- -------------
8 81,031 171,439 (5,757) 246,721
OPERATING EXPENSES
Direct cost................................. 4 61,668 123,822 -- 185,494
Intercompany expense........................ -- 345 5,412 (5,757) --
Depreciation and amortization............... 78 4,919 11,987 -- 16,984
General and administrative.................. 3,114 3,110 7,705 -- 13,929
----------- ----------- ----------- ----------- -------------
3,196 70,042 148,926 (5,757) 216,407
----------- ----------- ----------- ----------- -------------
OPERATING INCOME (LOSS)..................... (3,188) 10,989 22,513 -- 30,314
Earnings from unconsolidated entities....... 14,715 -- 2,609 (14,719) 2,605
Interest income............................. 13,951 223 515 (12,999) 1,690
Interest expense............................ 7,385 -- 15,651 (12,999) 10,037
----------- ----------- ----------- ----------- -------------
INCOME BEFORE PROVISION
FOR INCOME TAXES.......................... 18,093 11,212 9,986 (14,719) 24,572
Allocation of consolidated income taxes..... 923 3,657 2,794 -- 7,374
Minority interest........................... (601) -- (28) -- (629)
----------- ----------- ----------- ----------- -------------
NET INCOME..................................$ 16,569 $ 7,555 $ 7,164 $ (14,719) $ 16,569
=========== =========== =========== ============ =============
</TABLE>
13
<PAGE>
NOTE G - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - CONTINUED
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Parent Non-
Company Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities......................$ (2,759) $ 7,880 $ 18,093 $ -- $ 23,214
----------- ----------- ----------- ----------- -------------
Cash flows from investing activities:
Capital expenditures...................... -- (3,865) (10,320) -- (14,185)
Proceeds from asset dispositions.......... 6 144 2,331 -- 2,481
----------- ----------- ----------- ----------- -------------
Net cash provided by (used in)
investing activities...................... 6 (3,721) (7,989) -- (11,704)
----------- ----------- ----------- ----------- -------------
Cash flows from financing activities:
Repayment of debt......................... (3,300) -- (3,806) -- (7,106)
Repurchase of common stock................ (3,888) -- -- -- (3,888)
Issuance of common stock.................. 39 -- -- -- 39
----------- ----------- ----------- ----------- -------------
Net cash provided by (used in)
financing activities...................... (7,149) -- (3,806) -- (10,955)
----------- ----------- ----------- ----------- -------------
Effect of exchange rate changes in cash..... -- -- (296) -- (296)
----------- ----------- ----------- ----------- -------------
Net increase (decrease) in cash and
cash equivalents.......................... (9,902) 4,159 6,002 -- 259
Cash and cash equivalents
at beginning of period.................... 34,264 5,192 16,620 -- 56,076
----------- ----------- ----------- ----------- -------------
Cash and cash equivalents
at end of period.........................$ 24,362 $ 9,351 $ 22,622 $ -- $ 56,335
=========== =========== =========== =========== =============
</TABLE>
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company, through its Air Logistics' subsidiaries ("Air Log") and with
its investment in Bristow Aviation Holdings Limited ("Bristow"), is a major
supplier of helicopter transportation services to the worldwide offshore oil and
gas industry. The Company also provides production management services to the
worldwide oil and gas industry.
RESULTS OF OPERATIONS
A summary of operating results and other income statement information
for the applicable periods is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating revenue.......................................... $ 104,977 $ 128,162 $ 211,395 $ 245,435
Gain on disposal of equipment.............................. 565 1,006 1,527 1,286
Operating expenses......................................... (103,595) (111,676) (203,473) (216,407)
----------- ----------- ----------- -----------
Operating income........................................... 1,947 17,492 9,449 30,314
Earnings from unconsolidated entities...................... 1,085 1,505 2,187 2,605
Interest income (expense), net............................. (3,996) (4,223) (7,662) (8,347)
----------- ----------- ----------- -----------
Income (loss) before provision (benefit) for income
taxes................................................... (964) 14,774 3,974 24,572
Provision (benefit) for income taxes....................... (296) 4,435 1,235 7,374
Minority interest.......................................... (387) (323) (709) (629)
----------- ----------- ----------- -----------
Net income (loss).......................................... $ (1,055) $ 10,016 $ 2,030 $ 16,569
=========== =========== =========== ===========
</TABLE>
The following tables set forth certain operating information which will
form the basis for discussion of each of the Company's two identified segments,
Helicopter Activities and Production Management and Related Services. Beginning
in fiscal year 2000, the Company has changed the basis of segmentation within
its Helicopter Activities segment. The respective international operations of
Air Log (headquartered in the United States) and Bristow (headquartered in the
United Kingdom) will, from this point forward, be reported as a separate
division. The new International division will encompass all helicopter
activities outside of the United States Gulf of Mexico and Alaska (reported as
"Air Log") and the United Kingdom and Europe Sectors of the North Sea (reported
as "Bristow").
15
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------
CURRENT SEGMENT PREVIOUS SEGMENT FORMAT
FORMAT -----------------------------
1999 1999 1998
----------- ----------- -----------
(in thousands, except flight hours)
<S> <C> <C> <C>
Flight hours (excludes unconsolidated entities):
Helicopter Activities:
Air Log............................................... 28,019 32,520 34,867
Bristow............................................... 14,236 23,546 29,727
International......................................... 13,811 -- --
----------- ----------- -----------
Total.............................................. 56,066 56,066 64,594
=========== =========== ===========
Operating revenues:
Helicopter Activities:
Air Log.............................................. $ 25,205 $ 29,497 $ 35,926
Bristow.............................................. 46,323 66,671 83,318
International........................................ 24,640 -- --
Less: Intercompany.................................. (60) (60) (286)
----------- ----------- -----------
Total.............................................. 96,108 96,108 118,958
Production management and related services............... 9,503 9,503 9,913
Corporate................................................ 40 40 2
Less: Intercompany...................................... (674) (674) (711)
----------- ----------- -----------
Consolidated total................................. $ 104,977 $ 104,977 $ 128,162
=========== =========== ===========
Operating income, excluding gain or loss on disposal of equipment:
Helicopter Activities:
Air Log.............................................. $ 4,016 $ 5,429 $ 8,768
Bristow.............................................. (5,238) (4,467) 8,011
International........................................ 2,184 -- --
----------- ----------- -----------
Total.............................................. 962 962 16,779
Production management and related services............... 582 582 632
Corporate................................................ (162) (162) (926)
----------- ----------- -----------
Consolidated total................................. $ 1,382 $ 1,382 $ 16,485
=========== =========== ===========
Gross margin, excluding gain or loss on disposal of equipment:
Helicopter Activities:
Air Log.............................................. 15.9 % 18.4 % 24.4%
Bristow.............................................. (11.3)% (6.7)% 9.6%
International........................................ 8.9 % -- --
Total.............................................. 1.0 % 1.0 % 14.1%
Production management and related services............... 6.1 % 6.1 % 6.4%
Consolidated total................................. 1.3 % 1.3 % 12.9%
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------
CURRENT SEGMENT PREVIOUS SEGMENT FORMAT
FORMAT -----------------------------
1999 1999 1998
----------- ----------- -----------
(in thousands, except flight hours)
<S> <C> <C> <C>
Flight hours (excludes unconsolidated entities):
Helicopter Activities:
Air Log............................................... 52,419 60,730 65,839
Bristow............................................... 30,462 48,928 55,692
International......................................... 26,777 -- --
----------- ----------- -----------
Total.............................................. 109,658 109,658 121,531
=========== =========== ===========
Operating revenues:
Helicopter Activities:
Air Log.............................................. $ 46,973 $ 55,360 $ 66,910
Bristow.............................................. 97,938 138,319 159,148
International........................................ 48,768 -- --
Less: Intercompany.................................. (156) (156) (418)
----------- ----------- -----------
Total.............................................. 193,523 193,523 225,640
Production management and related services............... 19,001 19,001 21,446
Corporate................................................ 199 199 9
Less: Intercompany...................................... (1,328) (1,328) (1,660)
----------- ----------- -----------
Consolidated total................................. $ 211,395 $ 211,395 $ 245,435
=========== =========== ===========
Operating income, excluding gain or loss on disposal of equipment:
Helicopter Activities:
Air Log.............................................. $ 6,510 $ 9,334 $ 13,617
Bristow.............................................. (3,582) (2,308) 15,400
International........................................ 4,098 -- --
----------- ----------- -----------
Total.............................................. 7,026 7,026 29,017
Production management and related services............... 1,149 1,149 1,440
Corporate................................................ (253) (253) (1,429)
----------- ----------- -----------
Consolidated total................................. $ 7,922 $ 7,922 $ 29,028
=========== =========== ===========
Gross margin, excluding gain or loss on disposal of equipment:
Helicopter Activities:
Air Log.............................................. 13.9 % 16.9 % 20.4%
Bristow.............................................. (3.7)% (1.7)% 9.7%
International........................................ 8.4 % -- --
Total.............................................. 3.6 % 3.6 % 12.9%
Production management and related services............... 6.0 % 6.0 % 6.7%
Consolidated total................................. 3.7 % 3.7 % 11.8%
</TABLE>
17
<PAGE>
HELICOPTER ACTIVITIES
Air Log and Bristow conduct helicopter activities principally in the
Gulf of Mexico and the North Sea, respectively, where they provide support to
the production, exploration and construction activities of oil and gas
companies. Air Log also charters helicopters to governmental entities involved
in regulating offshore oil and gas operations in the Gulf of Mexico and provides
helicopter services to the Alyeska Pipeline in Alaska. Bristow also provides
search and rescue work for the British Coast Guard. International's activities
include Air Log and Bristow's operations in the following countries: Australia,
Brazil, China, Colombia, Cyprus, India, Kazakastan, Kosovo, Mexico, Nigeria and
Trinidad. These international operations are subject to local governmental
regulations and to uncertainties of economic and political conditions in those
areas. International also includes Air Log's service agreements with, and equity
interests in, entities that operate aircraft in Egypt and Mexico
("unconsolidated entities").
Air Log's flight activity for the three and six-month periods ended
September 30, 1999 is below the similar prior year levels by 6.7% and 7.8%,
respectively. This lower level of activity is primarily due to reduced demand
for helicopter services by the oil and gas industry and an unseasonably high
level of storm evacuation flying during September 1998. Oil companies have been
slow to return to former levels of exploration and development activity
experienced prior to the precipitous decline in oil prices during calendar year
1998, despite resurgence in the price of oil during the current and previous
quarter. Revenue for the three and six-month periods ended September 30, 1999,
fell by 17.9% and 17.3%, respectively for the similar periods in the prior year.
This higher decrease in revenue in relation to flight hours was due to a shift
in the mix of aircraft generating revenue. Flight hours and revenue generated
from larger, crew change aircraft in the Gulf of Mexico decreased by 30% from
the similar quarter in the prior year, while smaller, production related
aircraft remained relatively unchanged. Air Log's operating margin of 18.4% for
the quarter compared to 24.4% for the similar quarter in the prior year and is
lower due to the decrease in flight hours from the higher margin crew change
aircraft discussed above, and increased compensation costs for pilots and other
employees. Notwithstanding the above, flight activity, revenue and margins have
increased by 15.3%, 14.1%, and 21.9%, respectively from the June 1999 quarter.
These increases result primarily from increased crew change activity and provide
a somewhat more optimistic perspective for Gulf of Mexico activities, although
there is no certainty that this trend will continue.
Bristow's flight hours for the three and six-month periods ended
September 30, 1999 decreased by 20.8% and 12.1%, respectively, from the similar
periods in the prior year. This decrease in flight activity was prevalent in
most of Bristow's major markets including the North Sea, Nigeria, Trinidad and
China. The decrease in North Sea activity is related to overall slowdown in
exploration and development activity in that market, and the previously reported
termination of contracts with two major customers, effective August 1, 1999. In
the year ago quarter, these two customers accounted for 3,980 flight hours and
$11.4 million in revenue as compared to only 1,061 hours and $2.9 million in
revenue, respectively, in the current quarter. Excluding the impact of this lost
work, North Sea flight hours and revenue for the remaining customer base
decreased by 19.1% and 21.1%, respectively, from the similar quarter in the
prior year as a result of reduced utilization and pricing pressures from
customers. The North Sea has been more adversely affected by low oil prices due
to generally higher exploration and production costs in that area when compared
with other production areas around the world. As such, this market may be slower
to rebound from improved commodity prices. Bristow's operating margin decreased
from 9.6% and 9.7% for the three and six-month periods ended September 30, 1998
to (6.7)% and (1.7)%, respectively, in the current periods. This decline in
margin is due to the reduced utilization and pricing pressures discussed above
and the terminated contracts and related restructuring charges. In order to
adjust its staffing to the current volume of work, Bristow initiated a
restructuring plan, which will reduce its North Sea workforce by 19%. At
September 30, 1999, $3.4 million had been incurred for terminated employees to
date, and an additional $1.6 million (primarily for severance costs) is expected
during the next two quarters. This $5 million in restructuring cost is reflected
in the current quarter's results. Absent these charges, Bristow's operating
margin for the three and six-month periods ended
18
<PAGE>
September 30, 1999 would have been, 1.0% and 1.9%. The Company expects to
realize at least $7 million in combined annual salary savings. In addition,
further cost reductions are being pursued as management works to establish a
more cost effective and competitive organization; however it is likely that
Bristow's results and operating margins will be adversely affected for some time
absent, increased activity in the North Sea market.
PRODUCTION MANAGEMENT AND RELATED SERVICES
Operating revenues for GPM decreased by 4.1% and 11.4% during the three
and six-month periods ended September 30, 1999, as compared to the similar
periods in the prior year. The decline in revenue was matched by a reduction in
costs, resulting in relatively flat operating income from period to period.
GPM's operating margin was essentially unchanged at 6% in the current quarter
compared to the year ago quarter.
CORPORATE AND OTHER
Earnings from unconsolidated subsidiaries decreased during the current
quarter primarily due to the deferral of distributions from the Company's
Mexican joint venture as a result of lower than expected activity levels. The
effective income tax rates from continuing operations were approximately 31% and
30% for the six months ended September 30, 1999 and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $34.5 million as of September 30, 1999,
a $36.1 million decrease from March 31, 1999. Working capital as of September
30, 1999 was $113.8 million, a $29.0 million decrease from March 31, 1999. Total
debt was $240.2 million as of September 30, 1999.
As of September 30, 1999, Bristow had a (pound)15 million ($24.6
million) revolving credit facility with a syndicate of United Kingdom banks that
matures on December 31, 2002. As of September 30, 1999, Bristow had (pound)1.4
million ($2.3 million) of letters of credit utilized and no funds were drawn
under this credit facility. As of September 30, 1999, the Company had a $20
million unsecured working capital line of credit with a bank that expires on
November 30, 1999 and a commitment from the bank to extend the expiration date
to September 30, 2001. No funds were drawn under this facility as of September
30, 1999. Management believes that its normal operations, lines of credit and
available financing will provide sufficient working capital and cash flow to
meet debt service needs for the foreseeable future.
During the six months ended September 30, 1999, the Company received
proceeds of $6.8 million from nine separate disposals of aircraft. During the
same period, the Company purchased six Bell 407's for $5.9 million, three S-61's
for $7.5 million and three Super Puma's for $20.4 million. In addition, the
Company placed $9.9 million into escrow, included in other assets as of
September 30, 1999, for the purchase of an additional S-61 and five S-76
aircraft. The Company has no other material capital commitments outstanding.
LEGAL MATTERS
The Company has received notices from the United States Environmental
Protection Agency that it is one of approximately 160 potentially responsible
parties ("PRP") at one Superfund site in Texas, one of over 300 PRPs at one site
in Louisiana and a PRP at one site in Rhode Island. The Company believes, based
on presently available information, that its potential liability for clean up
and other response costs in connection with these sites is not likely to have a
material adverse effect on the Company's business or financial condition.
19
<PAGE>
YEAR 2000 MATTERS
The Company is addressing its year 2000 exposure. The scope of management's
efforts includes both information technology (IT) systems, such as accounting
and financial ledgers and aircraft and pilot records, and non-IT systems (which
incorporate embedded technology), such as onboard navigational, communication
and safety systems. The Company has completed the replacement, remediation and
testing phase. Management has also investigated the year 2000 exposure posed by
its significant vendors and customers. Currently, the Company does not have any
IT or non-IT systems which directly interface with either its vendors' or
customers' systems. Accordingly, the Company's exposure will result from its
significant vendors' and customers' potential inability to achieve year 2000
compliance. Were this to occur, the Company could experience a disruption in the
supply of needed parts and repairs services and/or diminished demand for the
Company's aircraft, either of which could have a material impact on the
Company's business. Management has contacted significant vendors and customers
to ascertain their state of readiness and has not received any indication of
potential noncompliance from this group. No assurances can be given, however
that the Company's significant vendors and customers will not cause disruption
to the Company's operations. To date, the Company has spent $.4 million on its
replacement and remediation efforts and no additional expenditures are
contemplated. The Company does not separately account for the internal costs
incurred for its year 2000 compliance efforts. Such costs consist primarily of
salaries and benefits for the Company's IT personnel. The Company has developed
a contingency plan for the prospect that it or any of its significant vendors
and customers may be unable to achieve year 2000 compliance.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that entities recognize all
derivatives as either assets or liabilities in the statements of financial
position and measure those instruments at fair value. Changes in a derivative's
fair value are to be recognized currently in earnings unless specific hedge
accounting criteria are met. The company will be required to adopt SFAS No. 133
no later than April 1, 2001. The company has not yet quantified the impact to
its financial statements that may result from adoption of SFAS No. 133, however,
the Company does not use derivative instruments or hedging activities
extensively in its business and therefore the adoption of this new statement is
not expected to materially affect the Company's financial positions or results
of operations. The new statement could however cause volatility in the
components of other comprehensive income.
FORWARD LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements
included herein other than statements of historical fact are forward-looking
statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Factors that could cause actual results
to differ materially from those in the forward-looking statements contained in
this report include the possibility that the annual salary cost savings,
currently expected to be realized as a result of recent employee terminations,
will not be as large as management presently expects, that Bristow's results and
operating margins will not be as adversely affected, and for as long as
management currently anticipates, and that there is a substantially increased
level of activity in the Company's markets. Other important factors that could
cause actual results to differ materially from the Company's expectations (with
those included in the prior sentence "Cautionary Statements") may include, but
are not limited to, demand for Company services, worldwide activity levels in
oil and natural gas exploration, development and production, fluctuations in oil
20
<PAGE>
and natural gas prices, unionization and the response thereto by the Company's
customers, currency fluctuations, international political conditions, the
ability to achieve reduced operating expenses and the ability to achieve year
2000 compliance. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Cautionary Statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No change from 1999 annual report disclosures.
21
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The annual meeting of stockholders was held on September 20, 1999.
(c) Matters voted on at the meeting included:
1. For the election of directors, all nominees were approved. The results were
as follows:
Nominee For Withheld
- ------------------------- ------------- ----------
Peter N. Buckley 17,567,927 215,207
Jonathan H. Cartwright 17,574,453 208,681
Louis F. Crane 17,572,385 210,749
David M. Johnson 17,557,088 226,046
Kenneth M. Jones 17,572,364 210,770
Harry C. Sager 17,573,559 209,575
George M. Small 17,574,520 208,614
Howard Wolf 17,552,958 230,176
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Listed below are the documents filed as exhibits to this report:
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
There were no Form 8-K filings during the quarter ended September 30, 1999.
22
<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.
OFFSHORE LOGISTICS, INC.
BY: /s/ George M. Small
-------------------------
GEORGE M. SMALL
PRESIDENT
DATE: November 12, 1999
BY: /s/ H. Eddy Dupuis
-------------------------
H. EDDY DUPUIS
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
DATE: November 12, 1999
23
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From The
September 30, 1999 Financial Statements And Is Qualified In Its Entirety By
Reference To Such Financial Statements.
</LEGEND>
<CIK> 0000073887
<NAME> Offshore Logistics, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 34,462
<SECURITIES> 0
<RECEIVABLES> 97,983
<ALLOWANCES> 0
<INVENTORY> 80,703
<CURRENT-ASSETS> 219,955
<PP&E> 603,311
<DEPRECIATION> 136,036
<TOTAL-ASSETS> 739,229
<CURRENT-LIABILITIES> 106,132
<BONDS> 229,932
0
0
<COMMON> 211
<OTHER-SE> 291,260
<TOTAL-LIABILITY-AND-EQUITY> 739,229
<SALES> 211,395
<TOTAL-REVENUES> 212,922
<CGS> 172,786
<TOTAL-COSTS> 203,473
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,396
<INCOME-PRETAX> 3,974
<INCOME-TAX> 1,235
<INCOME-CONTINUING> 2,030
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,030
<EPS-BASIC> 0.10
<EPS-DILUTED> 0.10
</TABLE>
