PHI, Inc. Announces Results for the Year Ended December 31, 2017

LAFAYETTE, La.--()--PHI, Inc. (The Nasdaq Select Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the year ended December 31, 2017.

Consolidated operating revenues for the year ended December 31, 2017 were $579.5 million, compared to $634.1 million for the year ended December 31, 2016, a decrease of $54.6 million compared to the year ended December 31, 2016. Oil and Gas segment operating revenues decreased $25.7 million for the year ended December 31, 2017, related primarily to decreased aircraft flight revenues resulting predominately from less aircraft on contract and decreased flight hours. Operating revenues in our Air Medical segment decreased $24.6 million due principally to decreased revenues attributable to overseas operations. Technical Services operating revenues decreased $4.2 million due to a reduction in services provided to a third party customer. Consolidated net income for the year ended December 31, 2017 was $7.5 million compared to a net loss of $26.7 million for the year ended December 31, 2016. The increase in net income is primarily due to the income tax benefit realized in the current year, primarily attributable to a change in the U.S. Federal Corporate income tax law. We had 15.8 million and 15.7 million weighted average diluted common shares outstanding during the years ended December 31, 2017 and 2016, respectively.

Oil and Gas segment loss was $28.8 million for the year ended December 31, 2017, compared to a loss of $27.3 million for the prior year period. The $1.5 million increase in segment loss was primarily due to the decreased revenues, partially offset by decreased expenses.

Air Medical segment profit was $35.8 million for the year ended December 31, 2017, compared to segment profit of $43.0 million for the year ended December 31, 2016. The $7.2 million decrease in segment profit is primarily attributable to the lapse of our overseas contract in late 2016, partially offset by an increase in profits from our U.S.-based programs.

Technical Services segment profit was $5.6 million for the year ended December 31, 2017, compared to $7.1 million for the year ended December 31, 2016. The $1.5 million decrease in segment profit is primarily attributable to a decrease in technical services provided to a third party customer.

For additional information, please see (i) the attachments hereto and (ii) the Annual Report on Form 10-K for the year ended December 31, 2017 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
December 31,
2017
Year Ended
December 31,
2016
Year Ended
December 31,
2015
Operating revenues, net $ 579,545 $ 634,098 $ 804,228
Expenses:
Direct expenses 546,699 592,550 687,050
Selling, general and administrative expenses 53,817   44,418   46,422  
Total operating expenses 600,516 636,968 733,472
Loss (gain) on disposition of assets, net 298 (3,350 ) 339
Impairments of assets 368 407
Equity in loss (profit) of unconsolidated affiliate 385   (151 ) 306  
Operating income (22,022 ) 224 70,111
Interest expense 32,176 30,644 29,066
Other income, net (2,764 ) (3,271 ) (2,211 )
29,419   27,373   26,855  
(Loss) earnings before income taxes (51,441 ) (27,149 ) 43,256
Income tax (benefit) expense (58,973 ) (469 ) 16,332  
Net earnings (loss) $ 7,532   $ (26,680 ) $ 26,924  
Earnings (loss) per share:
Basic $ 0.48 $ (1.70 ) $ 1.73
Diluted $ 0.48 $ (1.70 ) $ 1.72
Weighted average shares outstanding:
Basic 15,762 15,663 15,566
Diluted 15,762 15,663 15,642
 

A-1

 
 

Summarized financial information concerning the Company’s reportable operating segments for the years ended December 31, 2017, 2016, and 2015:

 
Year Ended December 31,
2017   2016   2015
(Thousands of dollars)
Segment operating revenues
Oil and Gas $ 298,398 $ 324,129 $ 459,611
Air Medical 257,273 281,868 312,775
Technical Services 23,874   28,101   31,842  
Total operating revenues 579,545   634,098   804,228  
Segment direct expenses
Oil and Gas (1) 321,272 344,640 411,757
Air Medical 208,987 227,877 246,487
Technical Services 16,825   19,882   29,112  
Total segment direct expenses 547,084 592,399 687,356
Segment selling, general and administrative expenses
Oil and Gas 5,899 6,739 6,511
Air Medical 12,442 10,968 10,455
Technical Services 1,405   1,101   805  
Total segment selling, general and administrative expenses 19,746   18,808   17,771  
Total segment expenses 566,830   611,207   705,127  
Net segment (loss) profit (2)
Oil and Gas (28,773 ) (27,250 ) 41,343
Air Medical 35,844 43,023 55,833
Technical Services 5,644   7,118   1,925  
Total net segment profit 12,715 22,891 99,101
Other, net (3) 2,098 6,214 1,872
Unallocated selling, general and administrative expenses (34,071 ) (25,610 ) (28,651 )
Interest expense (32,183 ) (30,644 ) (29,066 )
(Loss) earnings before income taxes $ (51,441 ) $ (27,149 ) $ 43,256  
 
 

(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,
2017   2016   2015
 
Total net segment profit $ 12,716 $ 22,891 $ 99,101
 
Other, net 2,098 6,214 1,872
Unallocated selling, general and administrative costs (34,071 ) (25,610 ) (28,651 )
Interest expense   (32,184 )   (30,644 )   (29,066 )
Earnings before income taxes $ (51,441 ) $ (27,149 ) $ 43,256  
 

(3)

Includes gains on disposition of property and equipment, asset impairments, and other income.

 

A-2

Contacts

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

Contacts

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