Bristow Group Inc 10-Q for FY2020 Q1

About this 10-Q

Headline figures

Bristow Group Inc. (VTOL)

10-Q 2020-05-05 For: 2020-03-31

Added on April 10, 2026

Bristow Group Inc filed this 10-Q on May 5, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

March 31,
2020

December 31,
2019

Weighted average remaining lease term

Weighted average discount rate

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $57.06M; up 11.2% from $51.29M a year earlier
Net loss: $7.23M; compared with a net loss of $5.94M a year earlier

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Delaware		72-1455213
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

945 Bunker Hill Rd., Suite 650
Houston,	Texas	77024
(Address of Principal Executive Offices)		(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ERA	NYSE



Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
¨	ý	¨	☐	☐



Part I.	Financial Information		2

	Item 1.	Financial Statements (Unaudited)	2

		Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	2

		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019	3

		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2020 and 2019	4

		Condensed Consolidated Statement of Changes in Redeemable Noncontrolling Interest and Equity for the Three Months Ended March 31, 2020 and 2019	5

		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

	Item 4.	Controls and Procedures	30

Part II.	Other Information		30

	Item 1.	Legal Proceedings	30

	Item 1A.	Risk Factors	31

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

	Item 3.	Defaults upon Senior Securities	33

	Item 4.	Mine Safety Disclosures	33

	Item 5.	Other Information	33

	Item 6.	Exhibits	33

ERA GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)

	March 31, 2020			December 31, 2019
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	113,518		$	117,366
Receivables:
Trade, operating, net of allowance for doubtful accounts	34,102			32,730
Trade, dry-leasing	5,754			5,234
Tax receivables	2,159			2,860
Other	15,006			15,421
Inventories, net	19,941			20,066
Prepaid expenses	3,412			2,184
Total current assets	193,892			195,861
Property and equipment	893,585			895,063
Accumulated depreciation	(345,457		)	(338,164		)
Property and equipment, net	548,128			556,899
Operating lease right-of-use	8,672			9,468
Intangible assets	92			96
Other assets	1,726			2,191
Total assets	$	752,510		$	764,515
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	12,475		$	12,923
Accrued wages and benefits	6,565			10,554
Accrued interest	3,309			520
Accrued income taxes	2,297			3,612
Accrued other taxes	1,539			937
Accrued contingencies	701			598
Current portion of long-term debt	17,901			18,317
Other current liabilities	3,310			3,315
Total current liabilities	48,097			50,776
Long-term debt	142,004			141,832
Deferred income taxes	101,984			103,793
Operating lease liabilities	7,103			7,815
Deferred gains and other liabilities	920			745
Total liabilities	300,108			304,961
Commitments and contingencies (see Note 7)
Redeemable noncontrolling interest	2,752			2,812
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,756,272 and 21,285,613 outstanding in 2020 and 2019, respectively, exclusive of treasury shares	230			224
Additional paid-in capital	452,701			452,009
Retained earnings	7,463			14,692
Treasury shares, at cost; 1,236,282 and 1,152,826 shares in 2020 and 2019, respectively	(10,744		)	(10,183		)
Total equity	449,650			456,742
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	752,510		$	764,515



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2020			2019
Revenues:
Operating revenues	$	53,980		$	47,830
Dry-leasing revenues	3,076			3,463
Total revenues	57,056			51,293
Costs and expenses:
Operating	38,506			36,696
Administrative and general	12,745			8,875
Depreciation and amortization	9,507			9,450
Total costs and expenses	60,758			55,021
Loss on asset dispositions, net	(34		)	(124		)
Operating loss	(3,736		)	(3,852		)
Other income (expense):
Interest income	749			752
Interest expense	(3,439		)	(3,461		)
Foreign currency losses, net	(1,704		)	(126		)
Other, net	10			(11		)
Total other income (expense)	(4,384		)	(2,846		)
Loss before income taxes and equity earnings	(8,120		)	(6,698		)
Income tax benefit	(831		)	(1,588		)
Loss before equity earnings	(7,289		)	(5,110		)
Equity loss, net of tax	—			(975		)
Net loss	(7,289		)	(6,085		)
Net loss attributable to noncontrolling interest in subsidiary	60			142
Net loss attributable to Era Group Inc.	$	(7,229	)	$	(5,943	)

Loss per common share, basic and diluted	$	(0.35	)	$	(0.28	)

Weighted average common shares outstanding:
Basic	20,702,670			21,323,312
Diluted	20,702,670			21,323,312

ERA GROUP INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND EQUITY (unaudited, in thousands)

Three Months Ended March 31, 2020

				Era Group Inc. Stockholders’ Equity
	Redeemable Noncontrolling Interest			Common Stock		Additional Paid-In Capital			Retained Earnings			Treasury Shares			Accumulated Other Comprehensive Income		Total Equity
December 31, 2019	$	2,812		$	224	$	452,009		$	14,692		$	(10,183	)	$	—	$	456,742
Issuance of common stock:
Restricted stock grants	—			6		(6		)	—			—			—		—
Share award amortization	—			—		698			—			—			—		698
Purchase of treasury shares	—			—		—			—			(561		)	—		(561		)
Net loss	—			—		—			(7,289		)	—			—		(7,289		)
Net loss attributable to redeemable noncontrolling interest	(60		)	—		—			60			—			—		60
March 31, 2020	$	2,752		$	230	$	452,701		$	7,463		$	(10,744	)	$	—	$	449,650



Three Months Ended March 31, 2019

				Era Group Inc. Stockholders’ Equity
	Redeemable Noncontrolling Interest			Common Stock		Additional Paid-In Capital			Retained Earnings			Treasury Shares			Accumulated Other Comprehensive Income		Total Equity
December 31, 2018	$	3,302		$	219	$	447,298		$	18,285		$	(2,476	)	$	110	$	463,436
Issuance of common stock:
Restricted stock grants	—			4		(4		)	—			—			—		—
Employee Stock Purchase Plan	—			1		589			—			—			—		590
Share award amortization	—			—		807			—			—			—		807
Purchase of treasury shares	—			—		—			—			(5		)	—		(5		)
Net loss	—			—		—			(6,085		)	—			—		(6,085		)
Net loss attributable to redeemable noncontrolling interest	(142		)	—		—			142			—			—		142
March 31, 2019	$	3,160		$	224	$	448,690		$	12,342		$	(2,481	)	$	110	$	458,885



	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2020
LIABILITIES
Long-term debt, including current portion	$	159,905	$	—	$	155,120	$	—

December 31, 2019
LIABILITIES
Long-term debt, including current portion	$	160,149	$	—	$	166,691	$	—



	Minimum Payments
2020	$	1,657
2021	1,715
2022	1,234
2023	1,186
2024	987
Years subsequent to 2024	8,498
Total future minimum lease payments	15,277
Less: imputed interest	6,452
Present value of lease liabilities	$	8,825



	March 31, 2020		December 31, 2019
Operating lease right-of-use asset	$	8,672	$	9,468
Other current liabilities	$	1,722	$	1,773
Long-term lease liabilities	7,103		7,815
Total operating lease liabilities	$	8,825	$	9,588



	March 31, 2020			December 31, 2019
7.750% Senior Notes (excluding unamortized discount)	$	144,088		$	144,088
Senior secured revolving credit facility	—			—
Promissory notes	17,901			18,317
Total principal balance on borrowings	161,989			162,405
Portion due within one year	(17,901		)	(18,317		)
Unamortized debt issuance costs	(1,219		)	(1,320		)
Unamortized discount, net	(865		)	(936		)
Long-term debt	$	142,004		$	141,832


ITEM 1.	FINANCIAL STATEMENTS


1.	BASIS OF PRESENTATION AND ACCOUNTING POLICY


2.	FAIR VALUE MEASUREMENTS


3.	ACQUISITIONS AND DISPOSITIONS


(1)	Excludes weighted average common shares of 203,612 for each of the three months ended March 31, 2020 and 2019, for certain share awards as the effect of their inclusion would have been antidilutive.


4.	Allocate the transaction price to the performance obligations; and


5.	Recognize revenue as the performance obligations are satisfied.



	Number of Shares		Weighted Average Grant Price
Non-vested as of December 31, 2019	626,399		$	10.31
Restricted stock awards granted:
Non-employee directors	40,430		$	7.54
Employees	513,685		$	7.54
Vested	(282,263	)	$	10.44
Non-vested as of March 31, 2020	898,251		$	8.56



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	111,654		$	—		$	1,864		$	—		$	113,518
Receivables:
Trade, operating, net of allowance for doubtful accounts	—			28,738			5,364			—			34,102
Trade, dry-leasing	—			5,754			—			—			5,754
Tax receivable	—			2			2,157			—			2,159
Other	—			14,594			412			—			15,006
Inventories, net	—			19,927			14			—			19,941
Prepaid expenses	991			2,108			313			—			3,412
Total current assets	112,645			71,123			10,124			—			193,892
Property and equipment	—			876,767			16,818			—			893,585
Accumulated depreciation	—			(340,873		)	(4,584		)	—			(345,457		)
Property and equipment, net	—			535,894			12,234			—			548,128
Operating lease right-of-use	—			7,526			1,146			—			8,672
Investments in consolidated subsidiaries	189,347			—			—			(189,347		)	—
Intangible assets	—			—			92			—			92
Deferred income taxes	11,711			—			—			(11,711		)	—
Intercompany receivables	285,926			—			—			(285,926		)	—
Other assets	524			873			329			—			1,726
Total assets	$	600,153		$	615,416		$	23,925		$	(486,984	)	$	752,510
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1,239		$	10,078		$	1,158		$	—		$	12,475
Accrued wages and benefits	625			4,767			1,173			—			6,565
Accrued interest	3,259			50			—			—			3,309
Accrued income taxes	2,273			—			24			—			2,297
Accrued other taxes	—			1,201			338			—			1,539
Accrued contingencies	—			—			701			—			701
Current portion of long-term debt	—			17,901			—			—			17,901
Other current liabilities	1,126			1,904			280			—			3,310
Total current liabilities	8,522			35,901			3,674			—			48,097
Long-term debt	142,004			—			—			—			142,004
Deferred income taxes	—			112,788			907			(11,711		)	101,984
Intercompany payables	—			220,529			65,417			(285,946		)	—
Operating lease liabilities	—			6,219			884			—			7,103
Deferred gains and other liabilities	—			920			—			—			920
Total liabilities	150,526			376,357			70,882			(297,657		)	300,108
Redeemable noncontrolling interest	—			—			2,752			—			2,752
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,756,272 outstanding, exclusive of treasury shares	230			—			—			—			230
Additional paid-in capital	452,703			100,306			4,562			(104,870		)	452,701
Retained earnings	7,438			138,753			(54,271		)	(84,457		)	7,463
Treasury shares, at cost, 1,236,282 shares	(10,744		)	—			—			—			(10,744		)
Total equity	449,627			239,059			(49,709		)	(189,327		)	449,650
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	600,153		$	615,416		$	23,925		$	(486,984	)	$	752,510


•	risks related to the Company’s recently announced combination (the “Merger”) with Bristow Group Inc. (“Bristow”), including:


◦	the ability of Bristow and the Company to obtain necessary shareholder approvals,


◦	the ability to satisfy all necessary conditions on the anticipated closing timeline or at all,


◦	the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the Merger,


◦	conditions imposed in order to obtain required regulatory approvals for the Merger,


◦	the possibility that the expected synergies from the Merger will not be realized,


◦	difficulties related to the integration of the two companies,


◦	disruption from the anticipated Merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers, and


◦	the diversion of management time and attention to the anticipated combination;


•	the impact of the COVID-19 pandemic and supply decisions by Saudi Arabia and Russia have resulted in a decrease in the price of and demand for oil, which has caused, and may continue to cause, a decrease in the demand for the Company's services;


•	the Company’s reliance on a limited number of customers and the reduction of its customer base as a result of bankruptcies or consolidation;


•	risks that the Company’s customers reduce or cancel contracted services or tender processes or obtain comparable services through other forms of transportation;


•	the Company’s dependence on United States (“U.S.”) government agency contracts that are subject to budget appropriations;


•	cost savings initiatives implemented by the Company’s customers;


•	the Company’s ability to maintain an acceptable safety record and level of reliability;