PHI, Inc. Announces Results for the Second Quarter Ended June 30, 2014

LAFAYETTE, La.--()--PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended June 30, 2014.

Consolidated operating revenues for the three months ended June 30, 2014 were $212.1 million, compared to $195.5 million for the three months ended June 30, 2013, an increase of $16.6 million. Oil and Gas segment revenues were $128.0 million for the three months ended June 30, 2014, compared to $120.9 million for the three months ended June 30, 2013, an increase of $7.1 million. The increase in this segment’s revenues is primarily due to increased light and heavy aircraft flight revenues, primarily attributable to increased flight hours for these aircraft in the Gulf of Mexico, and incremental rate increases implemented over the past year. Operating revenues in the Air Medical segment were $79.4 million for the three months ended June 30, 2014, compared to $72.9 million for the three months ended June 30, 2013, an increase of $6.6 million.

Oil and Gas segment profit was $23.1 million for the quarter ended June 30, 2014, compared to segment profit of $22.1 million for the quarter ended June 30, 2013. The increase in segment profit was due to increased revenues, which were only partially offset by increased segment expenses. These revenue increases are attributable primarily to the above-described increase in light and heavy aircraft flight revenues.

Air Medical segment profit was $13.8 million for the quarter ended June 30, 2014, compared to a segment profit of $10.6 million for the quarter ended June 30, 2013. The increase in profit is primarily attributable to the increased revenues described above, which were partially offset by increased aircraft operating expenses, due principally to increased compensation expense.

Technical Services revenues were $4.7 million for the three months ended June 30, 2014, compared to $1.7 million for the three months ended June 30, 2013. Direct expenses, which consist predominately of cost of sales, increased $2.4 million compared to the prior year quarter. Technical Services segment profit was $0.4 million for the three months ended June 30, 2014, compared to a net loss of $0.2 million for the three months ended June 30, 2013.

Consolidated net earnings for the three months ended June 30, 2014 was $13.4 million, compared to net earnings of $19.5 million for the three months ended June 30, 2013. The decrease in net earnings for the quarter ended June 30, 2014 is attributable to the reduction in gains on asset dispositions and the pre-tax charge of $0.6 million related to the early retirement of our 8.625% Senior Notes, partially offset by increased profits in each of our segments. Excluding non-recurring items, our net income for the three months ended June 30, 2014 and June 30, 2013 was $13.9 million and $10.9 million, respectively, which represents an increase of $3.0 million. See attached reconciliation statement.

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 Market (symbols PHII and PHIIK).

 
 
 
 
 

PHI, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Thousands of dollars and shares, except per share data)

 
 
  Quarter Ended   Six Months Ended
June 30, June 30,
2014   2013 2014   2013
 
Operating revenues, net $ 212,145 $ 195,543 $ 409,216 $ 374,511
 
Expenses:
Direct expenses 170,357 159,494 329,010 307,697

Selling, general and administrative expenses

  11,660     10,024     20,988     18,290  
Total operating expenses 182,017 169,518 349,998 325,987
 
Loss (gain) on disposal of assets 242 (14,701 ) 1,315 (14,676 )
Impairment of assets -- 421 -- 421

Equity in loss of unconsolidated affiliate

  65     596     106     1,083  
Operating income 29,821 39,709 57,797 61,696
 
Interest expense 7,673 7,257 15,037 14,666
Loss on debt extinguishment 617 -- 29,833 --
Other income, net   (169 )   (73 )   (260 )   (225 )
  8,121     7,184     44,610     14,441  
 
Earnings before income taxes 21,700 32,525 13,187 47,255
Income tax expense   8,332     13,009     5,140     18,901  
Net earnings $ 13,368   $ 19,516   $ 8,047   $ 28,354  
 

Weighted average shares outstanding:

Basic 15,482 15,474 15,482 15,474
Diluted 15,696 15,674 15,595 15,673
 
Net earnings per share:
Basic $ 0.86 $ 1.26 $ 0.52 $ 1.83
Diluted $ 0.85 $ 1.25 $ 0.52 $ 1.81
 
 
 
 
 
 

Summarized financial information concerning our reportable operating segments for the quarters and six months ended June 30, 2014 and 2013 is as follows:

 
  Quarter Ended   Six Months Ended
June 30, June 30,
2014   2013 2014   2013
(Thousands of dollars) (Thousands of dollars)
Segment operating revenues
Oil and Gas $ 128,044 $ 120,970 $ 254,019 $ 233,801
Air Medical 79,427 72,859 147,379 136,246
Technical Services   4,674     1,714     7,818     4,464  
Total operating revenues, net   212,145     195,543     409,216     374,511  
 
Segment direct expenses
Oil and Gas 103,450 97,824 200,824 190,697
Air Medical 62,726 60,376 122,105 114,372
Technical Services   4,246     1,890     6,187     3,711  
Total direct expenses   170,422     160,090     329,116     308,780  
 
Segment selling, general and administrative expenses
Oil and Gas 1,489 1,027 2,523 1,940
Air Medical 2,936 1,909 5,089 3,749
Technical Services   1     --     3     --  
Total segment selling, general and administrative expenses   4,426     2,936     7,615     5,689  
Total segment expenses   174,848     163,026     336,731     314,469  
 
Net segment profit (loss)
Oil and Gas 23,105 22,119 50,672 41,164
Air Medical 13,765 10,574 20,185 18,125
Technical Services   427     (176 )   1,628     753  
Total   37,297     32,517     72,485     60,042  
 
Other, net (73 ) 14,353 (1,055 ) 14,480
Unallocated selling, general and administrative costs (7,234 ) (7,088 ) (13,373 ) (12,601 )
Interest expense (7,673 ) (7,257 ) (15,037 ) (14,666 )
Loss on debt extinguishment   (617 )   --     (29,833 )   --  
Earnings before income taxes $ 21,700   $ 32,525   $ 13,187   $ 47,255  
 
 
 
 
 
 

PHI, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Thousands of dollars)

 
 
  Quarter Ended   Six Months Ended
June 30, June 30,
2014   2013 2014   2013
 
Net earnings, as reported $ 13,368 $ 19,516 $ 8,047 $ 28,354
 
Add back: Loss on debt extinguishment, net of tax 380 -- 18,205 --
Loss on asset disposals, net of tax 149 -- 802 --
Impairment of assets -- 253 -- 253
 
Less: Gain on asset disposals, net of tax -- (8,821 ) -- (8,806 )
       
Net earnings, as adjusted $ 13,897 $ 10,948   $ 27,054 $ 19,801  
 
Net earnings per share, as adjusted:
Basic $ 0.90 $ 0.71 $ 1.75 $ 1.28
Diluted $ 0.89 $ 0.70 $ 1.73 $ 1.26
 
 
 

Contacts

PHI, Inc.
Trudy McConnaughhay, 337-235-2452
Chief Financial Officer

Contacts

PHI, Inc.
Trudy McConnaughhay, 337-235-2452
Chief Financial Officer