Offshore Logistics, Inc. Announces Earnings for the Third Fiscal Quarter Ended December 31, 2002 and Anticipated Pension Liabilities
LAFAYETTE, La.--(BUSINESS WIRE)--Feb. 10, 2003--Offshore Logistics, Inc. (NASDAQ:OLOG), today reported net income for the third quarter ended December 31, 2002 of $12.0 million, or $0.49 per diluted share, on revenues of $139.2 million, compared to net income of $10.8 million, or $0.45 per diluted share, on revenues of $128.1 million for the quarter ended December 31, 2001.
Net income for the nine months ended December 31, 2002 was $34.0 million, or $1.39 per diluted share on revenues of $420.1 million, compared to net income of $35.5 million, or $1.47 per diluted share on revenues of $384.1 million for the nine months ended December 31, 2001.
George Small, President and CEO of Offshore Logistics, Inc., said, "We are extremely pleased with our results for the quarter ended December 31, 2002. Our geographic diversification has served us well, with increases in flight activity from our International operations offsetting an approximate 5% decline in activity in both the North Sea and the Gulf of Mexico.
Internationally, our new contract in Nigeria, that began July 1, 2002, is largely responsible for the 16% increase in flight hours and 23% increase in revenue from these operations. Apart from expected seasonal declines, Bristow's operations have held up through December 31, 2002. This is despite the fact that North Sea drilling activity witnessed a downward trend throughout the quarter. Bristow's results benefited from contract revisions allowing it to pass on some of its cost increases to customers. At Air Logistics, the reduction in activity levels has had a negative impact on margins, causing them to decrease to 15% for the quarter versus 20.7% in the one year ago quarter. This softness generally mirrors the languishing Gulf of Mexico drilling activity levels."
The Company also reported that it expected to record additional pension liability for a Bristow sponsored defined benefit pension plan at the next normal measurement date (March 31, 2003). The Company currently has a liability of $34.8 million recorded on its balance sheet, representing the excess of the present value of the defined benefit plan liabilities over the fair value of plan assets that existed at March 31, 2002. The additional liability to be recorded, which arises from a fall in the value of plan assets and movements in interest rates, will be determined based on the value of plan assets and market interest rates in existence at March 31, 2003, and, based on currently available information, market conditions, and exchange rates as of January 31, 2003, is expected to be in the range of $75 to $90 million. Depending upon further movements in the market value of plan assets and interest rates, the exact amount actually recorded at March 31, 2003 could be materially different. In accordance with U.S. pension accounting rules, the liability will be recorded through a direct charge to stockholder's equity. As a result of this significant change in the under-funded status of the plan, the Company also expects that its net periodic pension cost charged to earnings for fiscal 2004 will increase over the amounts expensed in fiscal 2003, in the range of $11 to $14 million, although this estimate could also be materially different when finally determined at March 31, 2003. Additional charges to earnings will be required in future years, the exact amount of which will be dependent on market conditions as of such dates and their impact on the plan.
Commenting on the status of the pension plan, Mr. Small said, "We are facing the same issue as many other companies with defined benefit plans. The world's financial markets are now in their third consecutive year of decline, and have wreaked havoc on the funded status of these plans. Management is reviewing all options to mitigate the impact that the under-funded pension plan will have on the Company's financial position and results of operations."
At December 31, 2002, the Company's consolidated balance sheet reflected $411.2 million in shareholders' investment, $55.3 million in cash and $210.0 million of indebtedness.
OLOG will conduct a telephonic conference to discuss its third quarter with analysts, investors and other interested parties at 10:00 a.m. Central Time on Tuesday, February 11, 2003. Individuals wishing to access the conference call should dial (877) 822-9020 for domestic callers and (706) 679-7181 for international callers, approximately five to ten minutes prior to the start time. Please reference the Offshore Logistics, Inc. conference call hosted by George Small Conference ID No. 7732448. A replay of the conference call will be available two hours after completion of the teleconference. To hear that recording, dial (800) 642-1687 for domestic callers and (706) 645-9291 for international callers, and enter Conference ID number 7732448. The replay will be available until Tuesday, February 18, 2003. |
