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Old 24th Apr 2019, 13:18
  #228 (permalink)  
Miles Gustaph
 
Join Date: Jun 2008
Location: Behind a dusty desk, and in some really hot, dusty, wet and cold places subject to who is paying the bill. But mostly Gods own land.
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More extracts:
"OPERATIONAL BLUNDERS
In parallel with declining operating results and worrying balance sheet developments, Bristow’s management has been unable to implement necessary operational improvements. For example, from March 31, 2015 to December 31, 2018: - Helicopter fleet size as measured by large aircraft equivalent (LACE, a capacity-weighted measurement), remained unchanged at 167, with only minor interim fluctuations. - TTM operating expenses decreased only modestly, from $1,667.80 million on March 31, 2015 to $1,450.23 million on December 31, 2018 (-13.0%). - Bristow has projected its two fixed-wing airlines to be unprofitable on an adjusted EBITDA basis in fiscal year 2019 (which ended on March 31, 2019). - Since mid-2016, Bristow’s owned fleet of 16 model H225 helicopters has not operated commercially, following the fatal crash of another company’s helicopter of the same model. There has been no apparent effort to divest this fleet. To emphasize: it is GVIC’s opinion that even in the face of stunning declines in revenue, operating income and adjusted EBITDA, Bristow’s board failed to take even the most basic steps to rein in operating expenses or eliminate unprofitable or idled operations. The precipitous decline in the price of the common stock is a scathing indictment of the board’s inability to guide Bristow’s corporate strategy in a manner even remotely beneficial to shareholders.

CHAIN OF BAD DECISIONS
Rather than undertake the difficult and diligent work necessary to improve Bristow’s business and balance sheet, on November 9, 2018, Bristow’s board approved a self-described “transformational” acquisition of Columbia Helicopters, Inc. (“Columbia”) for $560 million. Bristow proposed funding the acquisition through the issuance of a bridge loan (with a rate of LIBOR plus 8.0%), a convertible note (converting into approximately 26.2 million newly issued shares of common stock), and the issuance of an additional 7.1 million shares of common stock – an inexplicably expensive financing package. The Columbia acquisition ultimately would have diluted existing Bristow shareholders by approximately 93%. GVIC opposed the acquisition, issuing a public letter on January 8, 2019 following repeated efforts to engage with Bristow’s board. Fortunately, Bristow and Columbia terminated the acquisition on February 11, 2019; however, the termination resulted in Bristow paying a $20 million termination fee to Columbia. In the midst of a deteriorating financial situation, and on the heels of terminating the Columbia acquisition, Bristow announced that it was unable to file its Form 10-Q for the quarter ended December 31, 2018 in a timely manner and further identified a material weakness in internal controls over financial reporting. Despite this announcement, on March 1, 2019, Bristow’s board promoted the CFO, L. Don Miller, to the position of CEO, filling a vacancy created by the departure of former CEO Jonathan Baliff. It is GVIC’s firm opinion that the hasty promotion of a senior executive who was intimately involved in Bristow’s failed financial undertakings is a testament to the poor business judgement and sense of timing demonstrated by Bristow’s directors."
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