|X| Quarterly Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange
Act of 1934
For the quarterly period ended December 31, 2004
OR
|_| Transition Report
Pursuant to Section 13 or 15(d)
of the Securities
Exchange Act of 1934
For the transition
period _____ to _____
Commission File Number 001-31617
Offshore Logistics, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 72-0679819 |
| (State or other jurisdiction of | (IRS Employer |
| incorporation or organization) | Identification Number) |
224 Rue de Jean | |
| Lafayette, Louisiana | 70508 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (337) 233-1221
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, (or of such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of April 1, 2005.
23,314,708 shares of Common Stock, $.01 par value
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
OFFSHORE LOGISTICS,
INC. AND SUBSIDIARIES
Consolidated Statements
of Income
(unaudited)
| Three Months Ended December 31, |
Nine Months Ended December 31, |
||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
2004 |
2003 | ||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||
| Gross revenue: | |||||||||||||||||||||||
| Operating revenue | $ | 155,977 | $ | 138,715 | $ | 462,083 | $ | 412,037 | |||||||||||||||
| Gain on disposal of assets | 2,021 | 357 | 8,177 | 2,588 | |||||||||||||||||||
| 157,998 | 139,072 | 470,260 | 414,625 | ||||||||||||||||||||
| Operating expense: | |||||||||||||||||||||||
| Direct cost | 115,719 | 107,551 | 338,058 | 310,224 | |||||||||||||||||||
| Depreciation and amortization | 10,790 | 9,778 | 31,820 | 29,077 | |||||||||||||||||||
| General and administrative | 11,075 | 10,973 | 33,084 | 28,060 | |||||||||||||||||||
| 137,584 | 128,302 | 402,962 | 367,361 | ||||||||||||||||||||
| Operating income | 20,414 | 10,770 | 67,298 | 47,264 | |||||||||||||||||||
| Earnings from unconsolidated affiliates, net | 1,769 | 1,930 | 5,690 | 6,880 | |||||||||||||||||||
| Interest income | 985 | 280 | 2,168 | 1,328 | |||||||||||||||||||
| Interest expense | 4,056 | 3,818 | 11,970 | 12,773 | |||||||||||||||||||
| Loss on extinguishment of debt | -- | -- | -- | (6,205 | ) | ||||||||||||||||||
| Other income (expense), net | (2,599) | (4,352 | ) | (2,038 | ) | (6,246 | ) | ||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||
| and minority interest | 16,513 | 4,810 | 61,148 | 30,248 | |||||||||||||||||||
| Provision for income taxes | 4,953 | 1,444 | 18,344 | 9,075 | |||||||||||||||||||
| Minority interest | (61 | ) | (576 | ) | (299 | ) | (1,615 | ) | |||||||||||||||
| Net income | $ | 11,499 | $ | 2,790 | $ | 42,505 | $ | 19,558 | |||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic | $ | 0.49 | $ | 0.12 | $ | 1.85 | $ | 0.87 | |||||||||||||||
| Diluted | $ | 0.49 | $ | 0.12 | $ | 1.82 | $ | 0.86 | |||||||||||||||
OFFSHORE LOGISTICS,
INC. AND SUBSIDIARIES
Consolidated Balance
Sheets
| (unaudited) December 31, 2004 |
March 31, 2004 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 149,920 | $ | 85,679 | |||||||
| Accounts receivable | 126,317 | 121,146 | |||||||||
| Inventories | 141,336 | 133,073 | |||||||||
| Prepaid expenses and other | 11,583 | 10,874 | |||||||||
| Total current assets | 429,156 | 350,772 | |||||||||
| Investments in unconsolidated affiliates | 38,204 | 38,929 | |||||||||
| Property and equipment - at cost: | |||||||||||
| Land and buildings | 29,192 | 26,594 | |||||||||
| Aircraft and equipment | 814,245 | 797,783 | |||||||||
| 843,437 | 824,377 | ||||||||||
| Less: accumulated depreciation and amortization | (247,606 | ) | (238,721 | ) | |||||||
| 595,831 | 585,656 | ||||||||||
| Goodwill | 26,872 | 26,829 | |||||||||
| Other assets | 42,830 | 42,717 | |||||||||
| $ | 1,132,893 | $ | 1,044,903 | ||||||||
| LIABILITIES AND STOCKHOLDERS' INVESTMENT | ||||||||
Current Liabilities: | ||||||||
| Accounts payable | $ | 34,221 | $ | 27,439 | ||||
| Accrued liabilities | 63,859 | 65,257 | ||||||
| Deferred taxes | 864 | 1,802 | ||||||
| Current maturities of long-term debt | 6,714 | 4,417 | ||||||
| Total current liabilities | 105,658 | 98,915 | ||||||
| Long-term debt, less current maturities | 256,337 | 251,117 | ||||||
| Other liabilities and deferred credits | 155,009 | 147,326 | ||||||
| Deferred taxes | 96,397 | 92,042 | ||||||
| Minority interest | 4,646 | 9,385 | ||||||
| Stockholders' Investment: | ||||||||
| Common Stock, $.01 par value, authorized 35,000,000 shares; | ||||||||
| outstanding 23,275,375 and 22,631,221 at December 31 and | ||||||||
| March 31, respectively (exclusive of 1,281,050 treasury shares) | 233 | 226 | ||||||
| Additional paid-in capital | 156,050 | 141,384 | ||||||
| Retained earnings | 395,107 | 352,602 | ||||||
| Accumulated other comprehensive income (loss) | (36,544 | ) | (48,094 | ) | ||||
| 514,846 | 446,118 | |||||||
| $ | 1,132,893 | $ | 1,044,903 | |||||
OFFSHORE LOGISTICS,
INC. AND SUBSIDIARIES
Consolidated Statements
of Cash Flows
(unaudited)
| Nine Months Ended December 31, |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | ||||||||||
| (in thousands) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 42,505 | $ | 19,558 | |||||||
| Adjustments to reconcile net income to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation and amortization | 31,820 | 29,077 | |||||||||
| Increase (decrease) in deferred taxes | 5,470 | 2,778 | |||||||||
| Gain on asset dispositions | (8,177 | ) | (2,588 | ) | |||||||
| Loss on extinguishment of debt | -- | 6,205 | |||||||||
| Equity in earnings from unconsolidated affiliates | |||||||||||
| over (under) dividends received | 8,826 | (4,459 | ) | ||||||||
| Minority interest in earnings | 299 | 1,615 | |||||||||
| (Increase) decrease in accounts receivable | 26 | 4,782 | |||||||||
| (Increase) decrease in inventories | (4,387 | ) | (5,484 | ) | |||||||
| (Increase) decrease in prepaid expenses and other | 974 | 7,438 | |||||||||
| Increase (decrease) in accounts payable | 4,989 | (4,353 | ) | ||||||||
| Increase (decrease) in accrued liabilities | (4,322 | ) | 1,844 | ||||||||
| Increase (decrease) in other liabilities and deferred credits | 1,849 | 311 | |||||||||
| Net cash provided by (used in) operating activities | 79,872 | 56,724 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (51,689 | ) | (53,806 | ) | |||||||
| Assets purchased on behalf of affiliate | -- | (35,394 | ) | ||||||||
| Proceeds from sale of assets to affiliate | -- | 35,394 | |||||||||
| Proceeds from asset dispositions | 39,805 | 4,758 | |||||||||
| Acquisitions, net of cash received | (1,986 | ) | -- | ||||||||
| Investments | (8,166 | ) | (1,729 | ) | |||||||
| Net cash provided by (used in) investing activities | (22,036 | ) | (50,777 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings | -- | 242,981 | |||||||||
| Repayment of debt and payment of debt redemption premiums | (1,794 | ) | (233,384 | ) | |||||||
| Re-purchase of shares from minority interests | (7,389 | ) | -- | ||||||||
| Payment to minority interests | (51 | ) | -- | ||||||||
| Issuance of common stock | 11,871 | 1,147 | |||||||||
| Net cash provided by (used in) financing activities | 2,637 | 10,744 | |||||||||
| Effect of exchange rate changes in cash | 3,768 | 5,734 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 64,241 | 22,425 | |||||||||
| Cash and cash equivalents at beginning of period | 85,679 | 56,800 | |||||||||
| Cash and cash equivalents at end of period | $ | 149,920 | $ | 79,225 | |||||||
| Interest, net of interest capitalized | $ | 14,450 | $ | 14,794 | |||||||
| Income taxes | $ | 19,920 | $ | 6,929 | |||||||
| Supplemental disclosure of non-cash investing activities: | |||||||||||
| Non monetary exchange of assets | $ | 5,876 | $ | -- | |||||||
OFFSHORE LOGISTICS,
INC. AND SUBSIDIARIES
Notes to Consolidated
Financial Statements
December 31, 2004
NOTE A — Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, any adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended December 31, 2004, are not necessarily indicative of the results that may be expected for the year ending March 31, 2005. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2004.
NOTE B — Earnings per Share
Basic earnings per common share were computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share for the three and nine months ended December 31, 2004 excluded 15,652 and 31,545 stock options, respectively, at a weighted average exercise price of $36.61 and $33.28, respectively, which were outstanding during the period but were anti-dilutive. The following table sets forth the computation of basic and diluted net income per share:
| Three Months Ended December 31, |
Nine Months Ended December 31, |
|||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
2004 |
2003 | |||||||||||||||||
| Net income (thousands of dollars): | ||||||||||||||||||||
| Income available to common stockholders | $ | 11,499 | $ | 2,790 | $ | 42,505 | $ | 19,558 | ||||||||||||
| Interest and redemption premium on convertible | ||||||||||||||||||||
| debt, net of taxes(1) | -- | -- | -- | -- | ||||||||||||||||
| Income available to common stockholders, | ||||||||||||||||||||
| plus assumed conversions | $ | 11,499 | $ | 2,790 | $ | 42,505 | $ | 19,558 | ||||||||||||
| Shares: | ||||||||||||||||||||
| Weighted average number of common | ||||||||||||||||||||
| shares outstanding | 23,272,477 | 22,555,042 | 22,954,297 | 22,526,949 | ||||||||||||||||
| Options and restricted stock units | 344,224 | 253,210 | 356,329 | 170,065 | ||||||||||||||||
| Convertible debt | -- | -- | -- | -- | ||||||||||||||||
| Weighted average number of common | ||||||||||||||||||||
| shares outstanding, plus assumed conversions | 23,616,701 | 22,808,252 | 23,310,626 | 22,697,014 | ||||||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.49 | $ | 0.12 | $ | 1.85 | $ | 0.87 | ||||||||||||
| Diluted | $ | 0.49 | $ | 0.12 | $ | 1.82 | $ | 0.86 | ||||||||||||
(1) The assumed conversion of the convertible debt is anti-dilutive for the nine months ended December 31, 2003.