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PHI, Inc. Announces Results for the Year Ended December 31, 2016

LAFAYETTE, La.--(BUSINESS WIRE)--

PHI, Inc. (The Nasdaq Select Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the year ended December 31, 2016.

Consolidated operating revenues for the year ended December 31, 2016 decreased $170.1 million compared to the year ended December 31, 2015. Oil and Gas segment revenues decreased $135.5 million related primarily to decreased aircraft flight revenues resulting predominately from less aircraft on contract and decreased flight hours. Operating revenues in the Air Medical segment decreased $30.9 million, due principally to decreased revenues attributable to overseas operations. Technical Services segment revenues decreased $3.7 million due to a reduction in services provided to a third party customer. Consolidated net loss for the year ended December 31, 2016 was $26.7 million, compared to net earnings of $26.9 million for the year ended December 31, 2015. The decrease in earnings is primarily due to the decreased profits in our Oil and Gas and Air Medical segments, partially offset by an increase in profits in our Technical Services segment, net gains on asset dispositions and decreases in our Corporate unallocated costs.

Oil and Gas segment loss was $27.3 million for the year ended December 31, 2016, compared to segment profit of $41.3 million for the prior year period. The decrease in segment profit was due to decreased revenues, which were only partially offset by decreased expenses.

Air Medical segment profit was $43.0 million for the year ended December 31, 2016, compared to a segment profit of $55.8 million for the year ended December 31, 2015. The decrease in profit is primarily attributable to the decreased revenues, partially offset by the decreased aircraft operating expenses.

Technical Services segment profit was $7.1 million for the year ended December 31, 2016, compared to $1.9 million for the year ended December 31, 2015. In 2015, we booked a loss in a project for a third party customer due to higher than expected labor hours incurred. In 2016, our project work associated with this customer was profitable.

For additional information, please see (i) the attachments hereto and (ii) the Annual Report on Form 10-K for the year ended December 31, 2016 that we filed today with the U.S. Securities and Exchange Commission.

PHI provides helicopter transportation and related services to a broad range of customers including the oil and gas and air medical industries, and also provides third-party maintenance services to select customers. PHI Voting Common Stock and Non-Voting Common Stock are traded on The NASDAQ Global Select Market (symbols PHII and PHIIK).

           

PHI, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Thousands of dollars and shares, except per share data)

 
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2016 2015 2014
 
Operating revenues, net $ 634,098 $ 804,228 $ 836,270
 
Expenses:
Direct expenses 592,550 687,050 670,007

Selling, general and administrative expenses

  44,418     46,422     43,171  
Total operating expenses 636,968 733,472 713,178
 
(Gain) loss on disposition of assets, net (3,350 ) 339 848
Impairments of assets 407 -- 10,508

Equity in (profit) loss of unconsolidated affiliate

  (151 )   306     96  
Operating income 224 70,111 111,640
 
Interest expense 30,644 29,066 29,510
Loss on debt extinguishment -- -- 29,833
Other income, net   (3,271 )   (2,211 )   (818 )
  27,373     26,855     58,525  
 
(Loss) earnings before income taxes (27,149 ) 43,256 53,115
Income tax (benefit) expense   (469 )   16,332     20,427  
Net (loss) earnings $ (26,680 ) $ 26,924   $ 32,688  
 
 
(Loss) earnings per share:
Basic $ (1.70 ) $ 1.73 $ 2.11
Diluted $ (1.70 ) $ 1.72 $ 2.08
 
Weighted average shares outstanding:
Basic 15,663 15,566 15,483
Diluted 15,663 15,642 15,685
 

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Summarized financial information concerning the Company’s reportable operating segments for the years ended December 31, 2016, 2015, and 2014:

   
Year Ended December 31,
2016     2015     2014
(Thousands of dollars)
 
Segment operating revenues
Oil and Gas $ 324,129 $ 459,611 $ 516,909
Air Medical 281,868 312,775 300,212
Technical Services   28,101     31,842     19,149  
Total operating revenues   634,098     804,228     836,270  
 
Segment direct expenses
Oil and Gas(1) 344,640 411,757 411,679
Air Medical 227,877 246,487 243,573
Technical Services   19,882     29,112     14,851  
Total segment direct expenses 592,399 687,356 670,103
 
Segment selling, general and administrative expenses
Oil and Gas 6,739 6,511 4,615
Air Medical 10,968 10,455 9,801
Technical Services   1,101     805     157  
Total segment selling, general and administrative expenses   18,808     17,771     14,573  
Total segment expenses   611,207     705,127     684,676  
 
Net segment (loss) profit
Oil and Gas (27,250 ) 41,343 100,615
Air Medical 43,023 55,833 46,838
Technical Services   7,118     1,925     4,141  
Total net segment profit (2) 22,891 99,101 151,594
 
 
Other, net (3) 6,214 1,872 (10,539 )
Unallocated selling, general and administrative expenses (25,610 ) (28,651 ) (28,597 )
Interest expense (30,644 ) (29,066 ) (29,510 )
Loss on debt extinguishment   --     --     (29,833 )
(Loss) earnings before income taxes $ (27,149 ) $ 43,256   $ 53,115  
 
(1) Includes equity in gain/loss of unconsolidated affiliate.
(2) Total net segment profit has not been prepared in accordance with generally accepted accounting principles (“GAAP”). Management believes this non-GAAP financial measure provides meaningful supplemental information regarding our results of operations. A description of the adjustments to and reconciliations of total net segment profit to the most comparable GAAP financial measure is as follows:
 
    Year Ended
December 31,
2016     2015     2014
 
Total net segment profit $ 22,891 $ 99,101 $ 151,594
 
Other, net 6,214 1,872 (10,539 )
Unallocated selling, general and administrative costs (25,610 ) (28,651 ) (28,597 )
Interest expense (30,644 ) (29,066 ) (29,510 )
Loss on debt extinguishment   --     --     (29,833 )
Earnings before income taxes $ (27,149 ) $ 43,256     $ 53,115  
 
(3) Includes gains on disposition of property and equipment, asset impairments, and other income.
 

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