PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended March 31, 2012.
Oil and Gas operating revenues increased $15.5 million for the quarter ended March 31, 2012, related primarily to increased medium and heavy aircraft flight hours and revenues resulting mainly from the continuing improvement in deepwater drilling activity since the Macondo incident in 2010. Flight hours were 25,714 for the current quarter compared to 24,253 for the same quarter in the prior year, an increase of 1,461 hours related to improvements in deepwater drilling activity subsequent to the Macondo incident.
Net Oil and Gas segment profit was $12.0 million for the quarter ended March 31, 2012, compared to $7.0 million for the quarter ended March 31, 2011. The increase of $5.0 million was primarily due to increased revenues of $15.5 million primarily in medium and heavy aircraft revenue offset by an increase in direct expense of $10.4 million.
Operating revenues in the Air Medical segment increased $3.8 million primarily due to increased revenues in the independent provider programs of $3.0 million. This increase was due to a slight improvement in the payor mix and also due to rate increases implemented in the prior and current year. Operating revenues related to hospital based contracts increased $0.8 million due to increases in flight hours. Individual patient transports in the Air Medical segment were 4,046 for the quarter ended March 31, 2012, compared to transports of 4,035 for the quarter ended March 31, 2011.
Net segment profit for the Air Medical segment was $3.3 million for the quarter ended March 31, 2012, compared to $0.8 million for the quarter ended March 31, 2011. The increase in segment profit in the Air Medical segment was primarily due to increased revenues as discussed above.
Technical Services revenues were $3.0 million for the three months ended March 31, 2012, compared to $3.8 million for the three months ended March 31, 2011. Our Technical Services segment’s operating income was $1.4 million for the three months ended March 31, 2012, compared to operating income of $1.8 million for the three months ended March 31, 2011.
Operating revenues for the three months ended March 31, 2012 were $138.1 million, compared to $119.6 million for the three months ended March 31, 2011, an increase of $18.5 million. Flight hours for the quarter ended March 31, 2012 were 34,065, compared to 32,438 for the quarter ended March 31, 2011.
Net income for the three months ended March 31, 2012 was $2.2 million, compared to a net loss of $2.7 million for the three months ended March 31, 2011. Earnings before income taxes for the three months ended March 31, 2012 was $3.6 million, compared to a loss before tax of $4.5 million for the same period in 2011. The increase in earnings before taxes for the quarter ended March 31, 2012 is related to the increased revenues and segment operating profit in the Oil and Gas and Air Medical segments. The quarter ended March 31, 2011 includes costs of $1.0 million representing diligence and other costs incurred related to a potential acquisition in which we were unsuccessful.
Our Oil and Gas segment continues to improve with additional deepwater drilling activity by our customers, with such activity projected to exceed pre-Macondo levels in the next 18 months and require us to provide additional medium and heavy aircraft. We were also awarded a contract in Alaska supporting an offshore project with two heavy aircraft, and awarded several projects in Ghana, West Africa with three medium aircraft.
Our Air Medical segment was awarded a hospital contract for three medium aircraft which commenced in May 2012, with the aircraft redeployed out of our oil and gas division. Also, in April 2012, our subsidiary PHI Air Medical, L.L.C. entered into a three-year contract with the Saudi Red Crescent Authority (“SRCA”) to provide helicopter emergency medical services in the Kingdom of Saudi Arabia, subject to our receipt of the escrow payment described below. The contract calls for us to place eight medium aircraft in service during 2012, along with support staff, and to operate and maintain the aircraft for the contract term. In connection with the contract, we have entered into an option agreement with the aircraft manufacturer, which upon exercise by us will obligate us to purchase seven new medium aircraft during 2012, and an aircraft purchase agreement, pursuant to which we would sell these aircraft to the company that will lease them to the SRCA, after we complete and configure the aircraft for use in emergency medical services. The contract envisions a transition of the program over time to qualified Saudi personnel, and pursuant to the contract we will provide training services to SRCA’s qualified pilots, technicians, paramedics and communications specialists. Our obligations under these agreements are contingent upon our receipt into escrow of the purchase price of the seven aircraft, less the deposit already paid by the SRCA, in the near term. Air Medical segment earnings continue to improve due to rate increases and certain cost reductions that continue to be implemented.
These items are more fully discussed in our Form 10-Q for the quarter ended March 31, 2012.
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)|
|Operating revenues, net||$||138,051||$||119,640|
|Gain on disposition of assets, net||11||146|
|Other, principally interest income||306||543|
Selling, general and administrative expenses
|Earnings (loss) before income taxes||3,630||(4,452||)|
|Income tax (benefit) expense||1,452||(1,781||)|
|Net earnings (loss)||$||2,178||$||(2,671||)|
Weighted average shares outstanding:
|Net earnings (loss) per share:|
Summarized financial information concerning the Company’s reportable operating segments for the quarters ended March 31, 2012 and 2011 is as follows:
|(Thousands of dollars)|
|Segment operating revenues|
|Oil and Gas||$||92,952||$||77,481|
|Total operating revenues||138,051||119,640|
|Segment direct expenses|
|Oil and Gas||80,014||69,598|
|Total direct expenses||118,698||108,206|
|Segment selling, general and administrative expenses|
|Oil and Gas||897||882|
|Total selling, general and administrative expenses||2,557||1,826|
|Total direct and selling, general and administrative expenses||121,255||110,032|
|Net segment profit|
|Oil and Gas||12,041||7,001|
|Total net segment profit||16,796||9,608|
|Unallocated selling, general and administrative costs||(6,283||)||(7,717||)|
|Earnings (loss) before income taxes||$||3,630||$||(4,452||)|
The following tables present certain non-financial operational statistics for the quarters ended March 31, 2012 and 2011:
|Oil and Gas||25,714||24,253|
|Air Medical Transports||4,046||4,035|
|Aircraft operated at period end:|
|Oil and Gas|