PHI, Inc. (Nasdaq: PHII (voting); PHIIK (non-voting)) today
reported financial results for the year ended December 31,
2018.
PHI, Inc (the “Company”) today announced a net loss from
continuing operations for the year ended December 31, 2018 of
$141.5 million, or $8.95 per share, on revenue of $674.4 million.
This compares to a net gain from continuing operations of $7.5
million, or $0.48 per share, for the year ended December 31, 2017,
on revenue of $579.5 million.
The Company recorded a pre-tax expense of $109.0 million on
asset impairments in the fourth quarter of 2018. These charges
included a $61.6 million of goodwill impairment, $31.8 million of
aircraft and related spare parts impairment and $15.6 million of
intangibles impairment. Also included in the 2018 loss is $5.2
million of pre-tax costs associated with special projects.
Excluding these one-time charges, the resulting adjusted net loss
for the year ended December 31, 2018 was $40.3 million, or $(2.55)
per share. Included in the net loss for the year ended
December 31, 2017 is a one-time tax benefit of $49.2 million
related to the impact of the 2017 Tax Cuts and Jobs Act. Excluding
this tax benefit, the resulting adjusted net loss for the year
ended December 31, 2017 was $41.7 million, or $(2.64) per
share.
Oil and Gas segment operating revenues increased $81.8 million
for the year ended December 31, 2018. The increase is attributable
principally to revenue derived from our recently-acquired HNZ
Offshore business and secondarily from an increase in revenues from
our legacy international Oil and Gas operations, partially offset
by a decrease in revenues from our Gulf of Mexico operations.
Operating revenues in our Air Medical segment were essentially
flat, decreasing just under $0.2 million. Technical Services
operating revenues increased $13.2 million due to an increase
in services provided to a third party customer.
Oil and Gas segment loss was $10.2 million for the year ended
December 31, 2018, compared to a loss of $28.8 million for the
prior year. The $18.2 million decrease in segment loss was due to
the increased revenues detailed above, partially offset by
increased expenses. Air Medical segment profit was $12.5 million
for the year ended December 31, 2018, compared to segment
profit of $35.8 million for the year ended December 31, 2017.
The $23.3 million decrease in profit is due in part to increased
expenses related to new bases that were not operating in the prior
year and higher employee compensation costs for existing
operations. Technical Services segment profit was $6.8 million
for the year ended December 31, 2018, compared to
$5.6 million for the year ended December 31, 2017. The
$1.2 million increase in segment profit is primarily attributable
to an increase 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, 2018 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
SUBSIDIARIESConsolidated Statements of
Operations(Thousands of dollars and shares, except per share
data)
Year EndedDecember
31, 2018 Year EndedDecember
31, 2017 Year EndedDecember
31, 2016 Operating revenues, net $ 674,423 $ 579,545 $
634,098 Expenses: Direct expenses 631,807 546,699 592,550 Selling,
general and administrative expenses 66,685 53,817
44,418 Total operating expenses 698,492 600,516 636,968 Loss
(gain) on disposition of assets, net 753 298 (3,350 ) Impairments
of assets 109,024 368 407 Equity in loss (profit) of unconsolidated
affiliate (188 ) 385 (151 ) Operating income (133,658 )
(22,022 ) 224 Interest expense 33,981 32,183 30,644 Other income,
net (179 ) (2,764 ) (3,271 ) 33,802 29,419 27,373
(Loss) earnings before income taxes (167,460 ) (51,441 )
(27,149 ) Income tax (benefit) expense (25,946 ) (58,973 ) (469 )
Net earnings (loss) $ (141,514 ) $ 7,532 $ (26,680 )
Earnings (loss) per share: Basic $ (8.95 ) $ 0.48 $ (1.70 ) Diluted
$ (8.95 ) $ 0.48 $ (1.70 ) Weighted average shares outstanding:
Basic 15,818 15,762 15,663 Diluted 15,818 15,762 15,663
A-1
Summarized financial information
concerning the Company’s reportable operating segments for the
years ended December 31, 2018, 2017, and 2016:
Year Ended December 31, 2018
2017 2016 (Thousands of dollars) Segment
operating revenues Oil and Gas $ 380,238 $ 298,398 $ 324,129 Air
Medical 257,132 257,273 281,868 Technical Services 37,053
23,874 28,101 Total operating revenues 674,423
579,545 634,098 Segment direct expenses Oil and Gas
(1) 371,930 321,272 344,640 Air Medical 230,840 208,987
227,877 Technical Services 28,849 16,825 19,882
Total segment direct expenses 631,619 547,084 592,399
Segment selling, general and administrative expenses Oil and Gas
18,485 5,899 6,739 Air Medical 13,833 12,442 10,968 Technical
Services 1,418 1,405 1,101 Total segment
selling, general and administrative expenses 33,736 19,746
18,808 Total segment expenses 665,355 566,830
611,207 Net segment (loss) profit Oil and Gas (10,177
) (28,773 ) (27,250 ) Air Medical 12,459 35,844 43,023 Technical
Services 6,786 5,644 7,118 Total net segment
profit
(2) 9,068 12,715 22,891 Impairments of assets
(109,024 ) (368 ) (407 ) Other, net
(3) (574 ) 2,466 6,621
Unallocated selling, general and administrative expenses (32,949 )
(34,071 ) (25,610 ) Interest expense (33,981 ) (32,183 ) (30,644 )
(Loss) earnings before income taxes $ (167,460 ) $ (51,441 ) $
(27,149 )
(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,
2018 2017 2016
Total net segment profit $ 9,068 $ 12,715 $ 22,891
Impairment of assets (109,024 ) (368 ) (407 ) Other, net (574 )
2,466 6,621 Unallocated selling, general and administrative costs
(32,949 ) (34,071 ) (25,610 ) Interest expense (33,981 )
(32,183 ) (30,644 ) Earnings before income taxes $
(167,460 ) $ (51,441 ) $ (27,149 )
(3) Includes gains on disposition of
property and equipment, asset impairments, and other income.
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)
Twelve months ended
December 31, 2018 December 31, 2017
December 31, 2016 Consolidated
Per
Share
Consolidated
Per
Share
Consolidated
Per
Share
Reported net earnings (loss) (141,514 ) (8.95 ) 7,532 0.48 (26,680
) (1.69 ) Asset impairment 109,024 6.89 0.4 0 0.4 0 Restructuring
costs 5,176 0.33 0 0 0 0 Income taxes (12,948 ) (0.82 ) 0 0 0 0 US
Tax Reform (1) 0 0 (49,219 ) (3.12 ) 0 0
Adjusted net earnings (loss) (2) (40,262 ) (2.55 ) (41,687 )
(2.64 ) (26,680 ) (1.69 )
(1) Recorded in Income Taxes in the
consolidated statement of operations
(2) These financial measures are provided
to enhance investors’ overall understanding of the Company’s
current financial performance.
A-3
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Trudy McConnaughhayChief Financial Officer(337) 235-2452