Bristow Group Inc. Q3 FY2024 earnings call

• Safety remains Bristow’s number one core value and highest operational priority. - Raised Bristow’s adjusted EBITDA guidance for full year 2024 to $220 million to $230 million. - Q3 operating revenues increased due to higher utilization and favorable foreign exchange, but operating expenses were higher due to various factors including labor agreement finalization, repairs/maintenance, and new contracts. - Operating cash flows were $66 million in Q3, a 96% increase from prior quarter. - Funded 60% of capital investments for UK and Irish Coast Guard contracts, with remaining expected to conclude in next two quarters. - Strong balance sheet and liquidity position with $260 million available liquidity as of September 30th.

Operating revenues increased $3.9 million, primarily due to higher utilization and favorable foreign exchange rate impacts in government services and Fixed Wing services, partially offset by lower utilization in Americas' offshore energy services. EBITDA adjusted to exclude special items, asset dispositions and foreign exchange was $60.2 million for the third quarter of 2024 compared to $71.3 million in the preceding quarter. Africa region has performed better than expected and is expected to maintain strong performance. Americas and UK OES have higher ad-hoc activity, and Fixed Wing has short-term increase in charter activity.

• Raised 2024 adjusted EBITDA guidance to $220 million to $230 million. - 2025 will be a year of operationalizing Irish Coast Guard and UK SAR 2G contracts while performing on offshore energy business. - 2026 expected to see more significant increase in adjusted EBITDA as contracts are fully operationalized.

• Supply chain challenges continue to impact. - Delays in S92 components causing some airframes to remain idle. - Seasonal and non-recurring items impact operating expenses.

Q: Could you elaborate on factors behind recent decrease in utilization within the Americas region and outlook for utilization?

A: Lower utilization in Americas in Q3 due to change in accounting for Cougar and completion of a project in Suriname. Outlook remains positive with positive demand signals in Suriname, Brazil, and mature markets like Trinidad and US Gulf of Mexico.

Q: Could you break down remaining components of expense increase and guidance on future costs?

A: Outside personnel cost, repairs and maintenance fluctuate with flight hours and aircraft type, and other expense relates to new contracts like search and rescue business.

Q: Thoughts on 2025 outlook and maintaining guidance?

A: 2025 will operationalize Irish Coast Guard and UK SAR 2G contracts, with 2026 seeing significant EBITDA increase as contracts are fully operationalized.

Q: Feasibility of funding $125 million for new government contract CapEx in two quarters?

A: Yes, primarily aircraft deliveries for UK SAR 2G and Irish Coast Guard contracts, which are beginning to start.

Q: Details on labor settlement in the UK and long-term implications?

A: Finalized new collective bargaining agreement with UK air crews, including back pay for prior periods, and have a multi-year agreement that works for both employees and company.

Q: Impact of Lockheed's S92 gearbox lifecycle change and supply chain parts?

A: Extension is helpful for returning S92 to service, but other components still have significant delays causing airframes to remain idle.

Q: Election implications on customer activity?

A: Will monitor changes in policy, but company is multinational with 85% revenues from other countries.

Q: Funding of new government contract CapEx and impact on liquidity/leverage?

A: Funded via upsized facilities for UK SAR and Irish Coast Guard contracts, will increase leverage in next couple of quarters then level out.

Q: Update on capital allocation strategy as investment phase nears end?

A: Prioritize protection of strong balance sheet, fund organic growth, and evaluate returning capital to shareholders via share repurchases or dividends once big government projects are funded.