PHI, Inc. Announces Results for the Second Quarter Ended June 30, 2010

LAFAYETTE, La.--(BUSINESS WIRE)--PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended June 30, 2010.

Oil and Gas segment revenues were $94.7 million for the three months ended June 30, 2010, compared to $79.0 million for the three months ended June 30, 2009, an increase of $15.7 million. Operating income was $18.7 million for the three months ended June 30, 2010, compared to $13.7 million for the three months ended June 30, 2009.

As a result of the Deepwater Horizon incident, we have experienced increased flight hours associated with work at the well site and expect this to continue until such time as activities at the well site are completed. There is also additional flight activity associated with clean-up work and expect this to continue until such time as those activities are also completed. Offsetting these increased flight hours are decreased flight hours resulting from the suspension of deepwater drilling activities in the Gulf of Mexico. Many of the deepwater drilling rigs we have been servicing are still on location (although not drilling), and therefore we are still conducting crew changes to those rigs. It is not possible to estimate how long these rigs will remain in their current status, but if these drilling rigs demobilize or leave the Gulf of Mexico, there will be a further adverse affect to our flight activity. These issues are more fully discussed in our Form 10-Q for June 30, 2010.

Air Medical segment revenues were $43.1 million for the three months ended June 30, 2010, compared to $42.6 million for the three months ended June 30, 2009, an increase of $0.5 million. Operating income was $3.7 million for the three months ended June 30, 2010, compared to $2.4 million for the three months ended June 30, 2009.

Technical Services revenues were $1.7 million for the three months ended June 30, 2010 and June 30, 2009. There was an operating loss of $0.1 million for the three months ended June 30, 2010, compared to operating income of $0.4 million for the three months ended June 30, 2009.

Operating revenues for the three months ended June 30, 2010 were $139.6 million, compared to $123.3 million for the three months ended June 30, 2009, an increase of $16.3 million. Our net income for the three months ended June 30, 2010 was $7.0 million, or $0.46 per diluted share, compared to $3.7 million for the three months ended June 30, 2009, or $0.24 per diluted share.

Flight hours for the quarter ended June 30, 2010 were 40,258, compared to 39,246 for the quarter ended June 30, 2009.

Operating revenues for the six months ended June 30, 2010 were $261.2 million, compared to $240.3 million for the same period in 2009, an increase of $20.9 million.

Our net income for the six months ended June 30, 2010 was $11.1 million, or $0.72 per diluted share, compared to $5.7 million for the six months ended June 30, 2009, or $0.38 per diluted share.

Total flight hours were 74,870 for the six months ended June 30, 2010 compared to 74,310 for the six months ended June 30, 2009.

Certain statements in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “forecast,” “anticipate,” “estimate,” “project,” “intend,” “expect,” “should,” “believe,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, performance (financial or operating) or achievements to differ materially from the results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. These factors include adverse weather, competition, the level of activity in the oil and gas industry (particularly in the Gulf of Mexico) and our ability to continue to grow patient transport volumes. These and other factors are more fully discussed in the Company’s SEC filings under “Risk Factors.”

PHI provides helicopter transportation and related services to a broad range of customers including the oil and gas industry, air medical industry 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 Market (symbols PHII and PHIIK).

PHI, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Thousands of dollars and shares, except per share data)
	Quarter Ended					Six Months Ended
	June 30,					June 30,
	2010		2009			2010		2009
Operating revenues, net	$	139,597	$	123,321		$	261,206	$	240,273
Gain (loss) on dispositions of assets, net		117		(107	)		123		165
Other, principally interest income		5		65			36		128
		139,719		123,279			261,365		240,566
Expenses:
Direct expenses		116,101		104,912			220,308		207,039
Selling, general and administrative expenses		7,678		8,218			14,403		16,042
Interest expense		4,183		4,039			8,179		7,918
		127,962		117,169			242,890		230,999
Earnings before income taxes		11,757		6,110			18,475		9,567
Income tax expense		4,703		2,444			7,390		3,826
Net earnings	$	7,054	$	3,666		$	11,085	$	5,741
Weighted average shares outstanding:
Basic		15,312		15,303			15,312		15,302
Diluted		15,312		15,307			15,312		15,305
Net earnings per share:
Basic	$	0.46	$	0.24		$	0.72	$	0.38
Diluted	$	0.46	$	0.24		$	0.72	$	0.38

Summarized financial information concerning our reportable operating segments for the quarters and six months ended June 30, 2010 and 2009 is as follows:
	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(Thousands of dollars)						(Thousands of dollars)
Segment operating revenues
Oil and Gas	$	94,734		$	78,970		$	179,674		$	153,795
Air Medical		43,101			42,628			76,670			81,721
Technical Services		1,762			1,723			4,862			4,757
Total operating revenues		139,597			123,321			261,206			240,273
Segment direct expenses
Oil and Gas		75,845			64,963			146,098			126,247
Air Medical		38,385			38,620			70,011			77,498
Technical Services		1,871			1,329			4,199			3,294
Total direct expenses		116,101			104,912			220,308			207,039
Segment selling, general and administrative expenses
Oil and Gas		157			319			424			706
Air Medical		1,004			1,619			2,299			3,108
Technical Services		7			3			14			17
Total selling, general and administrative expenses		1,168			1,941			2,737			3,831
Total direct and selling, general and administrative expenses		117,269			106,853			223,045			210,870
Net segment profit
Oil and Gas		18,732			13,688			33,152			26,842
Air Medical		3,712			2,389			4,360			1,115
Technical Services		(116	)		391			649			1,446
Total		22,328			16,468			38,161			29,403
Other, net		122			(42	)		159			293
Unallocated selling, general and administrative costs		(6,510	)		(6,277	)		(11,666	)		(12,211	)
Interest expense		(4,183	)		(4,039	)		(8,179	)		(7,918	)
Earnings before income taxes	$	11,757		$	6,110		$	18,475		$	9,567

Operating Statistics
The following tables present certain non-financial operational statistics for the quarters and six months ended June 30, 2010 and 2009:
	Quarter Ended		Six Months Ended
	June 30,		June 30,
	2010	2009	2010	2009
Flight hours:
Oil and Gas	31,142	30,241	58,178	56,721
Air Medical	9,116	9,005	16,207	17,211
Technical Services	--	--	485	378
Total	40,258	39,246	74,870	74,310
Air Medical Transports	5,002	5,345	8,975	10,303
			June 30,
			2010	2009
Aircraft operated at period end:
Oil and Gas			164	158
Air Medical			85	89
Technical Services			4	4
Total			253	251