PHI, Inc. Announces Results For The Third Quarter Ended September 30, 2015

PHI, Inc. (The Nasdaq Global Market: PHII (voting) PHIIK (non-voting)) today reported financial results for the quarter ended September 30, 2015.

Consolidated operating revenues for the three months ended September 30, 2015 were $214.7 million, compared to $216.3 million for the three months ended September 30, 2014, a decrease of $1.6 million. Oil and Gas segment operating revenues decreased $12.6 million for the quarter ended September 30, 2015, related primarily to decreased aircraft flight revenues for light and medium model types resulting predominately from fewer aircraft on contract and decreased flight hours. Operating revenues in our Air Medical segment increased $6.4 million due principally to increased revenues attributable to our independent provider programs, primarily by an increase in transports. Technical Services revenues were $8.0 million for the three months ended September 30, 2015, compared to $3.5 million for the three months ended September 30, 2014. The increase in revenue is due primarily to an increase of technical services provided to a third party customer. The current projects with this customer are expected to be completed in the fourth quarter of 2015, after which additional projects are expected to begin and continue through 2016.

Oil and Gas segment profit was $10.3 million for the quarter ended September 30, 2015, compared to segment profit of $27.5 million for the quarter ended September 30, 2014. The decrease in segment profit is due to decreased revenues and increased expenses.

Air Medical segment profit was $17.7 million for the quarter ended September 30, 2015, compared to a segment profit of $15.7 million for the quarter ended September 30, 2014. The increase in segment profit is primarily attributable to the increased revenues described above, partially offset by increased operating expenses.

Technical Services segment earnings were $0.6 million for the three months ended September 30, 2015, compared to segment loss of $0.3 million for the three months ended September 30, 2014. Direct expenses increased $3.4 million compared to the prior year quarter. The increase in segment profit is attributable to the increased revenues.

Consolidated net earnings for the three months ended September 30, 2015 was $7.7 million compared to net earnings of $17.2 million for the three months ended September 30, 2014. Earnings before income taxes for the three months ended September 30, 2015 was $14.3 million compared to earnings before income tax of $28.3 million for the same period in 2014. Earnings per diluted share were $0.49 for the current quarter compared to earnings per diluted share of $1.10 for the prior year quarter. The decrease in net earnings for the quarter ended September 30, 2015 is principally attributable to the decreased profits in our Oil and Gas segment, partially offset by increased profits in our Air Medical and Technical Services segments.

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 Market (symbols PHII and PHIIK).
           
PHI, INC. AND SUBSIDIARIES
Consolidated Statements of Operations

(Thousands of dollars and shares, except per share data)
(Unaudited)
 
Quarter Ended Nine Months Ended
September 30, September 30,
2015     2014 2015     2014
 
Operating revenues, net $ 214,733 $ 216,294 $ 617,477 $ 625,510
 
Expenses:
Direct expenses 182,064 170,531 520,099 499,541

Selling, general and administrative expenses
 

11,575
    10,903     34,859     31,891  
Total operating expenses 193,639 181,434 554,958 531,432
 
(Gain) loss on disposal of assets (165 ) 56 (238 ) 1,371

Equity in loss (income) of unconsolidated affiliate
  75     (319 )   249     (213 )
Operating income 21,184 35,123 62,508 92,920
 
Interest expense 7,366 7,084 21,691 22,121
Loss on debt extinguishment -- -- -- 29,833
Other income, net   (472 )   (238 )   (1,501 )   (498 )
  6,894     6,846     20,190     51,456  
 
Earnings before income taxes 14,290 28,277 42,318 41,464
Income tax expense   6,621     11,028     17,832     16,168  
Net earnings $ 7,669   $ 17,249   $ 24,486   $ 25,296  
 

Weighted average shares outstanding:
Basic 15,587 15,483 15,558 15,483
Diluted 15,652 15,727 15,640 15,646
 
Net earnings per share:
Basic $ 0.49 $ 1.11 $ 1.57 $ 1.63
Diluted $ 0.49 $ 1.10 $ 1.57 $ 1.62
 
 

A-1
 
 
           

Unaudited summarized financial information concerning our reportable operating segments for the quarters and nine months ended September 30, 2015 and 2014 is as follows:
 
Quarter Ended Nine Months Ended
September 30, September 30,
2015     2014 2015     2014
(Thousands of dollars) (Thousands of dollars)
Segment operating revenues
Oil and Gas $ 121,190 $ 133,763 $ 354,425 $ 387,782
Air Medical 85,516 79,080 239,543 226,459
Technical Services   8,027     3,451     23,509     11,269  
Total operating revenues, net   214,733     216,294     617,477     625,510  
 
Segment direct expenses

Oil and Gas (1)
109,500 105,252 310,093 306,076
Air Medical 65,474 61,215 189,089 183,320
Technical Services   7,165     3,745     21,166     9,932  
Total direct expenses   182,139     170,212     520,348     499,328  
 
Segment selling, general and administrative expenses
Oil and Gas 1,397 1,047 3,831 3,570
Air Medical 2,302 2,212 7,458 7,301
Technical Services   230     --     552     3  
Total segment selling, general and administrative expenses   3,929     3,259     11,841     10,874  
Total segment expenses   186,068     173,471     532,189     510,202  
 
Net segment profit (loss)
Oil and Gas 10,293 27,464 40,501 78,136
Air Medical 17,740 15,653 42,996 35,838
Technical Services   632     (294 )   1,791     1,334  
Total   28,665     42,823     85,288     115,308  
 

Other, net (2)
637 182 1,739 (873 )
Unallocated selling, general and administrative costs (7,646 ) (7,644 ) (23,018 ) (21,017 )
Interest expense (7,366 ) (7,084 ) (21,691 ) (22,121 )
Loss on debt extinguishment   --     --     --     (29,833 )
Earnings before income taxes $ 14,290   $ 28,277   $ 42,318   $ 41,464  
 

______________

(1) Includes Equity in loss (increase) of unconsolidated affiliate.

(2) Consists of gains on disposition of property and equipment, and other income.
 
 

A-2

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