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PHI Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:

PHI Inc. (PHIIK) filed Quarterly Report for the period ended 2009-06-30.

Petroleum Helicopters Inc. provides helicopter transportation and related services worldwide to a broad range of customers including the oil and gasindustry and aeromedical programs. PHI Inc. has a market cap of $304.66 million; its shares were traded at around $19.89 with and P/S ratio of 0.59.

Highlight of Business Operations:

Net earnings for the quarter ended June 30, 2009 were $3.7 million, or $0.24 per diluted share, compared to $6.3 million for the quarter ended June 30, 2008, or $0.41 per diluted share. Pre-tax earnings were $6.1 million for the quarter ended June 30, 2009, compared to $10.4 million for the same period in 2008. The decrease was primarily due to a decrease in medium aircraft revenue due to a decrease in activity on the continental shelf, completion of a foreign contract in 2008 and a decrease in revenue related to fuel charges. These amounts were offset in part by an increase in revenue for medium aircraft activity related to deepwater activity and an increase in light aircraft flight hours. Earnings for the quarter ended June 30, 2008 included a $1.3 million pre-tax gain on dispositions of assets, offset by a charge of $2.1 million related to our aviation insurance and workers compensation coverages, of which $1.6 million was related to our Air Medical segment and $0.5 million was related to our Oil and Gas segment.

Direct Expenses Direct operating expense was $104.9 million for the three months ended June 30, 2009, compared to $109.8 million for the three months ended June 30, 2008, a decrease of $4.9 million. This decrease was primarily due to decreased fuel expense ($5.4 million) primarily due to reduced per-gallon fuel costs compared to the prior year quarter. There were also decreases in aircraft parts usage ($0.3 million), aircraft insurance ($0.3 million), aircraft warranty costs ($0.3 million), and other items, net ($0.3 million). Direct expense for the quarter ended June 30, 2008 included a $2.1 million charge related to our aviation insurance and workers compensation coverages related to accidents during the quarter. These decreases were partially offset by an increase in aircraft rent ($1.7 million) due to additional aircraft added to the fleet.

Direct expense in our Air Medical segment was $38.6 million for the three months ended June 30, 2009, compared to $43.3 million for the three months ended June 30, 2008. The $4.7 million decrease was due to a decrease in employee compensation costs ($1.6 million) due to the closure of six base locations and related reductions in support personnel. Insurance expense decreased ($0.5 million) due to the additional insurance charge of $1.1 million recorded in the prior year quarter relating to the accidents during the quarter. There were also decreases in aircraft warranty costs ($0.5 million) and aircraft rent ($0.4 million).

Direct expense in our Oil and Gas segment was $126.2 million for the six months ended June 30, 2009, compared to $124.1 million for the six months ended June 30, 2008, an increase of $2.1 million. Employee compensation expense increased ($2.5 million) primarily due to a compensation rate increase. Primarily as a result of additional aircraft in the fleet, we experienced increases in aircraft lease expense ($2.9 million), aircraft depreciation ($0.9 million), aircraft parts usage ($0.5 million) and aircraft insurance ($0.7 million). These increases were offset by a decrease in fuel expense ($6.3 million) as a result of a decrease in per-gallon fuel costs. Total fuel costs is included in direct expense and reimbursement of a portion of fuel costs above a contracted per-gallon amount is included in revenue.

Our cash position was $3.4 million at June 30, 2009 compared to $1.2 million at December 31, 2008. Short-term investments were $59.1 million at June 30, 2009, compared to $42.1 million at December 31, 2008. Working capital was $195.8 million at June 30, 2009, as compared to $174.0 million at December 31, 2008, an increase of $21.8 million. The increase in working capital was due to an increase in cash and cash equivalents of $2.3 million, an increase in short-term investments of $17.0 million due to receipt of proceeds from the disposition of an aircraft and from refunds of deposits on aircraft, a decrease in accounts receivable of $4.1 million due to decreased revenues, an increase in inventory of $3.6 million, and a decrease in accounts payable and accrued liabilities of $3.1 million.

Net cash provided by operating activities was $20.1 million for the six months ended June 30, 2009, compared to $13.2 million for the six months ended June 30, 2008, an increase of $6.9 million. There was a decrease in net earnings of $7.1 million. There was also a decrease in accounts receivable of $4.1 million at June 30, 2009 compared to an increase of $14.1 million at June 30, 2008, producing an increase of $18.1 million in cash from operating activities. Additionally, inventory increased $3.6 million in the current six-month period compared to an increase of $3.5 million in the prior six-month period, producing a decrease in cash from operating activities of $0.1 million. Accounts payable and accrued liabilities decreased $3.1 million compared to an increase of $1.3 million in the same period of 2008, producing a decrease in cash from operating activities of $4.4 million.

Read the The complete ReportPHIIK is in the portfolios of Ron Baron of Baron Funds.

Rating: 5.0/5 (1 vote)

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