U.S. Markets close in 4 hrs 49 mins

PHI, Inc. Announces Results for the First Quarter Ended March 31, 2019

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

PHI, Inc. (OTC: PHIIQ (voting) PHIKQ (non-voting)) today reported financial results for the quarter ended March 31, 2019.

Consolidated operating revenues for the three months ended March 31, 2019 were $151.9 million, compared to $160.4 million for the three months ended March 31, 2018, a decrease of $8.5 million. Oil and Gas segment operating revenues decreased $10.7 million for the three months ended March 31, 2019. Revenues from our Gulf of Mexico operations decreased $5.1 million, primarily due to adverse weather conditions. Revenues from our international Oil and Gas operations decreased $5.6 million due to lower contracted aircraft flight hours. Air Medical segment operating revenues decreased $0.4 million due principally to adverse weather conditions. Technical Services segment operating revenues increased $2.6 million due primarily to an increase in technical services provided to a third party customer.

Oil and Gas segment loss was $9.8 million for the three months ended March 31, 2019, compared to a loss of $5.8 million for the three months ended March 31, 2018. The $4.0 million decrease in segment loss is primarily attributable to a $10.7 million decrease in revenues, partially offset by $6.7 million decrease in expenses.

Air Medical segment loss was $3.7 million for the three months ended March 31, 2019, compared to a segment loss of less than $0.1 million for the three months ended March 31, 2018. The $3.7 million decrease in profit is attributable to a decrease in profit from our independent provider model bases.

Technical Services segment profit was $1.7 million for the three months ended March 31, 2019, compared to $1.5 million for the three months ended March 31, 2018.

The Company recorded a pre-tax expense of $10.7 million of associated with the restructuring process. Excluding these one-time charges, the resulting adjusted net loss for the quarter ended March 31, 2019 was $25.0 million, or $(1.59) per share.

For additional information, please see (i) the attachments hereto and (ii) Form 10-Q for the quarter ended March 31, 2019 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 in the OTC Markets Pink Sheets (symbols PHIIQ and PHIKQ).

 
 

PHI, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Condensed Consolidated Statements of Operations

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

(Unaudited)

 
Quarter Ended
March 31,
2019   2018
Operating revenues, net $ 151,890 $ 160,370
Expenses:
Direct expenses 156,874 156,226
Selling, general and administrative expenses 24,869   15,459  
Total operating expenses 181,743 171,685
Loss on disposal of assets 51 879
Equity in (income) loss of unconsolidated affiliates, net (1,361 ) 37  
Operating loss (28,543 ) (12,231 )
Interest expense 8,166 8,197
Reorganization items, net 1,600
Other income – net 40   1,045  
9,806   9,242  
Loss before income taxes (38,349 ) (21,473 )
Income tax benefit (3,108 ) (4,490 )
Net loss $ (35,241 ) $ (16,983 )
Weighted average shares outstanding:
Basic 15,825 15,806
Diluted 15,825 15,806
Net loss per share:
Basic $ (2.23 ) $ (1.07 )
Diluted $ (2.23 ) $ (1.07 )
 

 

A-1

 
 
 

Unaudited summarized financial information concerning our reportable operating segments for the quarters ended March 31, 2019 and 2018 is as follows:

 
Quarter Ended
March 31,
2019   2018
(Thousands of dollars)
Segment operating revenues
Oil and Gas $ 84,946 $ 95,640
Air Medical 56,646 56,988
Technical Services 10,298   7,742  
Total operating revenues, net 151,890   160,370  
Segment direct expenses (1) (2)
Oil and Gas (1) 89,968 96,507
Air Medical 57,081 53,832
Technical Services 8,464   5,887  
Total direct expenses 155,513 156,226
Segment selling, general and administrative expenses
Oil and Gas 4,761 4,921
Air Medical 3,292 3,167
Technical Services 148   370  
Total segment selling, general and administrative expenses 8,201   8,458  
Total segment direct and selling, general and administrative expenses 163,714   164,684  
Net segment (loss) profit
Oil and Gas (9,783 ) (5,788 )
Air Medical (3,727 ) (11 )
Technical Services 1,686   1,485  
Total net segment profit (11,824 ) (4,314 )
 
Other, net (3) (91 ) (1,961 )
Unallocated selling, general and administrative costs (1) (4) (18,268 ) (7,001 )
Interest expense (8,166 ) (8,197 )
(Loss) earnings before income taxes $ (38,349 ) $ (21,473 )
 
 

(1)

Included in direct expenses and unallocated selling, general, and administrative costs are the depreciation and amortization expense amounts below:

 

Depreciation and
Amortization Expense

Quarter Ended
March 31,
2019   2018
(Thousands of dollars)
Segment Direct Expense:
Oil and Gas $ 11,278 $ 11,783
Air Medical 5,286 5,624
Technical Services 71 145
Total $ 16,635   $ 17,552
Unallocated SG&A $ 1,809   $ 1,915
 

(2)

Includes equity in (earnings) of unconsolidated affiliates, net.

(3)

Consists of (gains) losses on disposition of property and equipment and other income.

(4)

Represents corporate overhead expenses not allocable to segments.

 
 

A-2

 
 

Non-GAAP Financial Measures

The following table reconciles the Company’s adjusted net earnings (loss) and the reported net earnings (loss), which is the directly comparable financial results determined in accordance with Generally Accepted Accounting Principles (GAAP).

 

Reconciliation of Consolidated Adjusted Net Earnings (Loss)

(in thousands)

(unaudited)

 
Three months ended,
March 31, 2019   March 31, 2018
Consolidated   Per Share Consolidated   Per Share
Reported net earnings (loss) (35,241 ) (2.23 ) (16,983 ) (1.07 )
Restructuring costs

10,666

0.67 0 0
Income taxes (444 ) (0.03 ) 0   0  
Adjusted net earnings (loss) (1) (25,019 ) (1.59 ) (16,983 ) (1.07 )
 

(1)

These financial measures are provided to enhance investors’ overall understanding of the Company’s current financial performance.

 
 

A-3

View source version on businesswire.com: https://www.businesswire.com/news/home/20190509006012/en/