LAFAYETTE, La., March 16, 2009 (GLOBE NEWSWIRE) -- PHI, Inc. ("PHI") (Nasdaq:PHII) (voting) (Nasdaq:PHIIK) (non-voting) today reported financial results for the year ended December 31, 2008.
Oil and Gas segment revenues for the year ended December 31, 2008 were $324.1 million, and operating income for the segment was $64.7 million. Air Medical segment revenues for the year ended December 31, 2008 were $174.7 million, and segment operating income was $5.1 million. Technical Services segment revenues for the year ended December 31, 2008 were $10.6 million and operating income for the segment was $3.7 million.
On a consolidated basis, operating revenues for the year ended December 31, 2008 were $509.5 million, net earnings for the year were $23.5 million ($1.54 per diluted share), and earnings before tax were $38.6 million. Included in earnings for 2008 are gains on disposition of assets of $4.5 million. Additionally, there is a charge of $2.7 million for goodwill impairment as further discussed below.
Oil and Gas segment revenues increased $38.0 million compared to the year ended December 31, 2007, and operating income increased $30.2 million in the segment. The increase was due to an increase in medium and heavy aircraft flight hours as compared to 2007. Also, there was an adverse affect on operating revenues and income in 2007 due to the pilots' strike. Air Medical segment revenues increased $25.1 million compared to 2007 due to increased patient transports and increased hospital-based contracts. Operating income increased $1.1 million in the Air Medical segment compared to the prior year, due to the increased patient transports in the independent provider programs and additional contract awards in hospital-based programs. Technical Services segment revenues for 2008 decreased $0.1 million compared to 2007, and operating income decreased $0.3 million.
Compared to the year ended December 31, 2007, consolidated operating revenues for 2008 increased $63.1 million. Net earnings decreased $4.7 million in 2008, and earnings before tax decreased $7.0 million compared to 2007. Included in earnings for 2007 were gains on disposition of assets of $35.0 million, compared to $4.5 million in gains on disposition of assets in 2008. Also, a goodwill impairment charge was recorded in 2008.
In the fourth quarter of 2008, the Company recorded a non-cash charge for the impairment of goodwill totaling $2.7 million related to a 2004 acquisition as part of planned expansion in the Air Medical segment. The impairment charge is driven by adverse equity market conditions that caused a decrease in current market multiples as of December 31, 2008, compared with the test performed as of December 31, 2007. The charge for goodwill impairment does not impact the Company's normal business operations. The Company does not have any goodwill recorded at December 31, 2008, after this charge described above. This is further discussed in the Company's Form 10-K.
Relative to our Oil and Gas segment, in late fourth quarter 2008 and in first quarter 2009, we received various contract extensions, contract awards, and additional aircraft added to some existing contracts. In particular, there was one five-year award for a medium and a heavy aircraft servicing deepwater drilling programs for a major customer and an additional heavy aircraft added to another major customer's requirements in support of deepwater drilling programs. There was also a net of seven light aircraft added to contracts to support primarily production operations. Thus far in 2009, we do not see any adverse affect on our Oil and Gas operations as a result of current economic conditions and oil and gas prices. This is in large part due to the concentration on deepwater projects, as the Company strategically focused its operations on that area in recent years.
Relative to our Air Medical segment in 2008 and first quarter 2009, we have seen some adverse impact in certain regions due to the current economic conditions. However, we placed in service one medium aircraft to accommodate emergency medical evacuation of offshore workers, with night vision capability which is the first in the offshore oil industry worldwide. Also, we were recently awarded two contracts utilizing light twin aircraft in support of hospital traditional programs, both contracts commencing in March 2009.
These items are more fully discussed in our Form 10-K.
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)
Year Ended Year Ended Year Ended
Dec. 31, Dec. 31, Dec. 31,
2008 2007 2006
---------- ---------- ----------
Operating revenues $ 509,514 $ 446,406 $ 413,118
Gain on disposition of assets, net 4,468 34,953 1,910
Other, principally interest income 522 5,098 8,036
---------- ---------- ----------
514,504 486,457 423,064
---------- ---------- ----------
Expenses:
Direct expenses 425,953 394,421 366,272
Selling, general and
administrative expenses 31,657 30,226 27,839
Interest expense 15,515 16,121 17,243
Goodwill impairment charges 2,747 -- --
Loss on debt restructuring -- -- 12,790
---------- ---------- ----------
475,872 440,768 424,144
---------- ---------- ----------
Earnings (loss) before income taxes 38,632 45,689 (1,080)
Income tax expense (benefit) 15,117 17,471 (413)
---------- ---------- ----------
Net earnings (loss) $ 23,515 $ 28,218 $ (667)
========== ========== ==========
Earnings (loss) per share:
Basic $ 1.54 $ 1.85 $ (0.05)
Diluted $ 1.54 $ 1.85 $ (0.05)
Weighted average shares outstanding:
Basic 15,295 15,279 13,911
Diluted 15,301 15,288 13,911
Summarized financial information concerning the Company's reportable
operating segments for the years ended December 31, 2008, 2007, and
2006:
Year Ended
December 31,
--------------------------------
2008 2007 2006
-------- -------- --------
(Thousands of dollars)
Segment operating revenues
Oil and Gas $324,147 $286,118 $270,707
Air Medical 174,739 149,590 133,397
Technical Services 10,628 10,698 9,014
-------- -------- --------
Total operating revenues 509,514 446,406 413,118
-------- -------- --------
Segment direct expenses
Oil and Gas 258,160 250,110 228,797
Air Medical 160,910 137,703 130,412
Technical Services 6,883 6,608 7,063
-------- -------- --------
Total direct expenses 425,953 394,421 366,272
Segment selling, general and
administrative expenses
Oil and Gas 1,335 1,531 1,150
Air Medical 8,716 7,883 7,384
Technical Services 76 59 38
-------- -------- --------
Total selling, general and
administrative expenses 10,127 9,473 8,572
-------- -------- --------
Total segment direct and selling,
general and administrative expenses 436,080 403,894 374,844
-------- -------- --------
Net segment profit (loss)
Oil and Gas 64,652 34,477 40,760
Air Medical 5,113 4,004 (4,399)
Technical Services 3,669 4,031 1,913
-------- -------- --------
Total 73,434 42,512 38,274
Other, net 4,990 40,051 9,946
Unallocated selling, general and
administrative expenses (21,530) (20,753) (19,267)
Interest expense (15,515) (16,121) (17,243)
Goodwill impairment charge (2,747) -- --
Loss on debt restructuring -- -- (12,790)
-------- -------- --------
Earnings (loss) before income taxes $ 38,632 $ 45,689 $ (1,080)
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Flight hours
Oil and Gas 112,341 107,812 119,503
Air Medical 36,732 31,341 29,980
Technical Services 1,613 1,216 1,497
-------- -------- --------
Total 150,686 140,369 150,980
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Air Medical Transports 22,647 21,710 20,808
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Aircraft operated at period end
Oil and Gas 153 156 164
Air Medical 90 77 68
Technical Services 6 4 4
-------- -------- --------
Total 249 237 236
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