Offshore Logistics, Inc. Announces Results for the Third Fiscal Quarte

    Business Editors

    LAFAYETTE, La.--(BUSINESS WIRE)--Feb. 3, 2005--Offshore Logistics, Inc. (NYSE: OLG) today reported net income for the third quarter ended December 31, 2004 of $11.5 million, or $0.49 per diluted share, on revenues of $158.0 million, compared to net income of $2.8 million, or $0.12 per diluted share, on revenues of $139.1 million for the third quarter ended December 31, 2003. Included in the net income reported for the third quarter ended December 31, 2003 are $3.0 million (pre-tax), or $0.09 per diluted share, of expenses related to Bristow's restructuring of its United Kingdom operations.
    Net income for the nine months ended December 31, 2004 was $42.5 million, or $1.82 per diluted share, on revenues of $470.3 million, compared to net income of $19.6 million, or $0.86 per diluted share on revenues of $414.6 million for the nine months ended December 31, 2003.
    William E. Chiles, Chief Executive Officer and President of Offshore Logistics, Inc. said, "We are proud of our impressive quarter over quarter and year over year comparisons for revenue, operating income and earnings, and of the success the Company has achieved this past year. The restructuring efforts undertaken by Bristow have begun to reward shareholders in terms of profitability improvement, customer retention and new contracts in the North Sea market. The operating margins reported for the North Sea in September and December of this year are the highest Bristow has experienced in the past 5 years. Additionally, the recent renewal by Bristow of the Shell contract and the award of a new contract from Talisman will provide a solid base to continue to grow market share. Furthermore, our international operations still remain a significant factor in our growth and success. Accordingly, I am pleased to report that in January 2005 Bristow was awarded a 5 year contract renewal for 5 medium size helicopters by an international oil company operating in Nigeria.
    Grasso Production Management is also achieving its share of success, reporting higher revenue, operating income and operating margin than in the comparable periods in the prior year. Unfortunately, however, exploration and drilling activity in the Gulf of Mexico did not rebound during calendar 2004 as we and others had expected. Lower flight activity, both quarter over quarter and sequentially, coupled with higher costs have negatively impacted our North America margins. We are exploring avenues to restore these margins; however, the current status of our negotiations with the pilots' union may hamper our ability to achieve this objective as quickly as we would like.
    We continue to await a response from the National Mediation Board on a release from negotiations with the union representing our North American Pilots. This release will start a thirty day cooling off period between the parties. If an agreement is not reached by the end of the thirty day cooling off period, the union will be free to engage in self-help measures such as a strike or work stoppage. As previously stated, we have developed contingency plans and are now putting those plans into motion in the event of a work action by the union, although there can be no guarantees that these plans will be 100% effective. However, our Gulf of Mexico flight operations currently only represent 25% of our total revenue, and therefore the labor situation should not overshadow the successes we have achieved and the opportunities we are pursuing in every other market we serve."
    At December 31, 2004, the Company's consolidated balance sheet reflected $514.8 million in shareholders' investment, $149.9 million in cash and $263.1 million of indebtedness.
    Management will conduct a telephonic conference to discuss its third quarter results with analysts, investors and other interested parties at 10:00 a.m. Central Time on Friday, February 4, 2005. Individuals wishing to access the conference call should dial (877) 822-9020 for domestic callers and (706) 679-7181 for international callers, approximately five to ten minutes prior to the start time. Please reference the Offshore Logistics, Inc. conference call hosted by William E. Chiles, Conference ID No. 3343168. A replay of the conference call will be available two hours after completion of the teleconference. To hear that recording, dial (800) 642-1687 for domestic callers and (706) 645-9291 for international callers, and enter Conference ID number 3343168. The replay will be available until 11:59 PM EST, Friday, February 11, 2005.

    Offshore Logistics, Inc. is a major provider of helicopter transportation services to the oil and gas industry worldwide. Through its subsidiaries, affiliates and joint ventures, the Company provides transportation services in most oil and gas producing regions including the United States Gulf of Mexico and Alaska, the North Sea, Africa, Mexico, South America, Australia, Egypt and the Far East. Additionally, the Company is a leading provider of production management services for oil and gas production facilities in the Gulf of Mexico. The Company's Common Stock is traded on the New York Stock Exchange under the symbol OLG.
    The tabulated results for the periods ended December 31, 2004 and 2003, are as follows (amounts in thousands, except earnings per share):

Three Months Ended Nine Months Ended December 31, December 31, ------------------ ------------------ 2004 2003 2004 2003 -------- -------- -------- --------

Revenue $157,998 $139,072 $470,260 $414,625 ======== ======== ======== ========

Net Income $ 11,499 $ 2,790 $ 42,505 $ 19,558 ======== ======== ======== ========

BASIC: Earnings per common share $ 0.49 $ 0.12 $ 1.85 $ 0.87 ======== ======== ======== ========

Weighted average number of common shares outstanding 23,272 22,555 22,954 22,527 ======== ======== ======== ========

DILUTED: Earnings per common share $ 0.49 $ 0.12 $ 1.82 $ 0.86 ======== ======== ======== ========

Weighted average number of common shares outstanding and assumed conversions 23,617 22,808 23,311 22,697 ======== ======== ======== ========

Selected operating data: Three Months Ended Nine Months Ended December 31, December 31, ------------------ ------------------ 2004 2003 2004 2003 -------- -------- -------- -------- (in thousands, except flight hours) Flight hours (excluding unconsolidated affiliates): Helicopter activities: North American Operations 28,180 29,369 92,604 94,394 North Sea Operations 9,207 10,399 30,521 33,542 International Operations 22,332 22,589 69,147 65,807 Technical Services 293 548 1,421 1,305 -------- -------- -------- -------- Total 60,012 62,905 193,693 195,048 ======== ======== ======== ========

Operating revenue: Helicopter activities: North American Operations $ 39,742 $ 39,416 $124,546 $119,925 North Sea Operations 48,554 43,083 146,125 131,834 International Operations 56,983 46,138 159,162 129,735 Technical Services 7,266 14,606 25,498 30,686 Less: Intercompany (9,688) (15,646) (31,018) (32,140) -------- -------- -------- -------- Total 142,857 127,597 424,313 380,040 Production Management Services 14,943 12,611 43,264 36,302 Corporate 2,438 2,925 7,555 8,877 Less: Intercompany (4,261) (4,418) (13,049) (13,182) -------- -------- -------- -------- Consolidated total $155,977 $138,715 $462,083 $412,037 ======== ======== ======== ========

Operating income: Helicopter activities: North American Operations $ 4,107 $ 7,070 $ 18,811 $ 20,628 North Sea Operations 8,793 (437) 25,170 8,261 International Operations 7,458 4,907 22,731 16,656 Technical Services (266) 1,023 (3,013) 1,296 -------- -------- -------- -------- Total 20,092 12,563 63,699 46,841 Production Management Services 1,219 540 2,985 1,942 Corporate (2,918) (2,690) (7,563) (4,107) Gain on disposal of assets 2,021 357 8,177 2,588 -------- -------- -------- -------- Consolidated total $ 20,414 $ 10,770 $ 67,298 $ 47,264 ======== ======== ======== ========

Operating margin: Helicopter activities: North American Operations 10.3% 17.9% 15.1% 17.2% North Sea Operations 18.1% (1.0)% 17.2% 6.3% International Operations 13.1% 10.6% 14.3% 12.8% Technical Services (3.7)% 7.0% (11.8)% 4.2% Total 14.1% 9.8% 15.0% 12.3% Production Management Services 8.2% 4.3% 6.9% 5.3% Consolidated total 13.1% 7.8% 14.6% 11.5%

Statements contained in this press release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements contained in this press release include the possibility that the restructuring efforts in the North Sea do not continue to yield improved profits, that the operating margin in the North Sea is not sustainable, that the Shell and Talisman contracts do not provide a basis for growth, that avenues to restore North American margins are not fruitful and that our contingency plans to deal with a union work action are ineffective. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's report on Form 10-K for the year ended March 31, 2004 and the Company's report on Form 10-Q for the quarters ended June 30, 2004 and September 30, 2004.

OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Statements of Income

Three Months Ended Nine Months Ended December 31, December 31, ------------------ ------------------ 2004 2003 2004 2003 -------- -------- -------- -------- (in thousands, except per share amounts) Gross revenue: Operating revenue $155,977 $138,715 $462,083 $412,037 Gain on disposal of assets 2,021 357 8,177 2,588 -------- -------- -------- -------- 157,998 139,072 470,260 414,625 Operating expenses: Direct cost 115,719 107,551 338,058 310,224 Depreciation and amortization 10,790 9,778 31,820 29,077 General and administrative 11,075 10,973 33,084 28,060 -------- -------- -------- -------- 137,584 128,302 402,962 367,361 -------- -------- -------- --------

Operating income 20,414 10,770 67,298 47,264

Earnings from unconsolidated affiliates, net 1,769 1,930 5,690 6,880 Interest income 985 280 2,168 1,328 Interest expense 4,056 3,818 11,970 12,773 Loss on extinguishment of debt -- -- -- (6,205) Other income (expense), net (2,599) (4,352) (2,038) (6,246) -------- -------- -------- --------

Income before provision for income taxes and minority interest 16,513 4,810 61,148 30,248

Provision for income taxes 4,953 1,444 18,344 9,075 Minority interest (61) (576) (299) (1,615) -------- -------- -------- --------

Net income $ 11,499 $ 2,790 $ 42,505 $ 19,558 ======== ======== ======== ========

Net income per common share: Basic $ 0.49 $ 0.12 $ 1.85 $ 0.87 ======== ======== ======== ======== Diluted $ 0.49 $ 0.12 $ 1.82 $ 0.86 ======== ======== ======== ========

OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES Consolidated Balance Sheets

Dec. 31, March 31, 2004 2004 ---------- ---------- (in thousands) ASSETS

Current Assets: Cash and cash equivalents $ 149,920 $ 85,679 Accounts receivable 126,317 121,146 Inventories 141,336 133,073 Prepaid expenses and other 11,583 10,874 ---------- ---------- Total current assets 429,156 350,772

Investments in unconsolidated affiliates 38,204 38,929 Property and equipment - at cost: Land and buildings 29,192 26,594 Aircraft and equipment 814,245 797,783 ---------- ---------- 843,437 824,377 Less: accumulated depreciation and amortization (247,606) (238,721) ---------- ---------- 595,831 585,656 Goodwill 26,872 26,829 Other assets 42,830 42,717 ---------- ---------- $1,132,893 $1,044,903 ========== ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts payable $ 34,221 $ 27,439 Accrued liabilities 63,859 65,257 Deferred taxes 864 1,802 Current maturities of long-term debt 6,714 4,417 ---------- ---------- Total current liabilities 105,658 98,915

Long-term debt, less current maturities 256,337 251,117 Other liabilities and deferred credits 155,009 147,326 Deferred taxes 96,397 92,042 Minority interest 4,646 9,385

Stockholders' Investment: Common Stock, $.01 par value, authorized 35,000,000 shares; outstanding 23,275,375 and 22,631,221 at December 31 and March 31, respectively (exclusive of 1,281,050 treasury shares) 233 226 Additional paid-in capital 156,050 141,384 Retained earnings 395,107 352,602 Accumulated other comprehensive loss (36,544) (48,094) ---------- ---------- 514,846 446,118 ---------- ---------- $1,132,893 $1,044,903 ========== ==========

--30--JC/na*

CONTACT: Offshore Logistics, Inc., Lafayette H. Eddy Dupuis, 337-233-1221 Fax: 337-235-6678 investorrelations@olog.com

KEYWORD: LOUISIANA INDUSTRY KEYWORD: OIL/GAS TRANSPORTATION ENERGY EARNINGS CONFERENCE CALLS SOURCE: Offshore Logistics, Inc.

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