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PHI Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 9, 2012 04:30PM

PHI Inc. (PHIIK) filed Quarterly Report for the period ended 2012-03-31. Phi Inc-nvt has a market cap of $404.9 million; its shares were traded at around $24.19 with a P/E ratio of 2616.2 and P/S ratio of 0.8. Phi Inc-nvt had an annual average earning growth of 1.2% over the past 10 years.



Highlight of Business Operations:

Operating revenues for the three months ended March 31, 2012 were $138.1 million, compared to $119.6 million for the three months ended March 31, 2011, an increase of $18.5 million. Oil and Gas segment operating revenues increased $15.5 million for the quarter ended March 31, 2012, related primarily to increased medium and heavy aircraft flight hours and revenues resulting mainly from the continuing improvement in deepwater drilling activity since the Macondo incident in 2010. Operating revenues in the Air Medical segment increased $3.8 million primarily due to increased revenues in the independent provider programs of $3.0 million. This increase was due to a slight improvement in the payor mix and also due to rate increases implemented in the prior and current year. Operating revenues related to hospital based contracts increased $0.8 million due to a new contract that began in the third quarter of the prior year.

Direct expense in our Oil and Gas segment was $80.0 million for the three months ended March 31, 2012, compared to $69.6 million for the three months ended March 31, 2011, an increase of $10.4 million. Fuel expense increased ($2.0 million) as a result of increased per-gallon fuel costs and increased flight hours. Total fuel cost is included in direct expense and reimbursement of a portion of these costs above a contracted per-gallon amount is included in revenue. Aircraft rent expense increased ($1.0 million) due to the acquisition of four heavy aircraft in 2011, funded with operating leases. There was an increase in aircraft depreciation ($0.9 million) due to additional aircraft added to the fleet, including those purchased off lease. Employee compensation expenses increased ($3.8 million) due to compensation rate increases and increased employees assigned to the Oil and Gas segment. Aircraft warranty costs increased ($2.2 million) due to increased flight hours. Other items increased, net ($0.5 million).

Our Oil and Gas segment profit was $12.0 million for the quarter ended March 31, 2012, compared to $7.0 million for the quarter ended March 31, 2011. Operating margins (segment profit divided by operating revenues) were 13% for the three months ended March 31, 2012, compared to 9% for the three months ended March 31, 2011. The increase in segment profit of $5.0 million was primarily due to increased revenues of $15.5 million, partially offset by increased direct expenses of $10.4 million as previously discussed. The Oil and Gas segment revenues are primarily driven by contracted aircraft and flight hours. Costs are primarily fixed and are driven by the number of aircraft. The variable portion is driven by flight hours.

Net cash provided by operating activities was $18.1 million for the three months ended March 31, 2012, compared to $14.4 million for the same period in 2011, an increase of $3.7 million. Net earnings adjusted for non-cash items contributed $12.3 million of cash flow for the three months ended March 31, 2012, compared to $3.2 million for the same period in 2011, an increase of $9.1 million, primarily due to the increase in earnings. This increase was offset in part by an increase in accounts receivable of $4.7 million due to the increase in revenue and an increase in other assets of $6.0 million related primarily to prepaid insurances and prepaid costs for certain projects.

Net cash used in investing activities was $6.0 million for the three months ended March 31, 2012, compared to $23.7 million cash provided by investing activities for the same period in 2011. Purchases and sales of short-term investments provided a net use of cash of less than $1.0 million during the three months ended March 31, 2012 compared to net cash provided of $28.6 million in the comparable prior year period. Capital expenditures were $12.5 million for the three months ended March 31, 2012, compared to $5.4 million for the same period in 2011. Capital expenditures for 2012 included $10.4 million for aircraft purchases, upgrades, and refurbishments. Capital expenditures for 2011 included $4.4 million for aircraft purchases, upgrades, and refurbishments. Gross proceeds from asset dispositions were $6.9 million for the three months ended March 31, 2012, compared to less than $1.0 million for the same period in 2011.

Read the The complete Report



Stocks Discussed: PHIIK,
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