Discovery Air Inc. announces results for the quarter ended October 31, 2012.
YELLOWKNIFE, NT, Dec. 10, 2012 /CNW/ - Discovery Air Inc. (the "Corporation"), announced its financial and operating results for the three and nine months ended October 31, 2012. The third quarter interim financial statements and management discussion and analysis ("MD&A") will be available on SEDAR at www.sedar.com and on the Corporation's website at www.discoveryair.com.
|Selected Financial Information||Three months ended October 31||Nine months ended October 31|
|(thousands of dollars, except per share amounts)||2012||2011||
|Basic earnings per common share||$||0.08||$||0.42||-81%||$||0.79||$||1.52||-48%|
|Diluted earnings per common share||$||0.08||$||0.31||-74%||$||0.63||$||1.23||-49%|
|Basic adjusted earnings per common share||$||0.27||$||0.35||-23%||$||0.81||$||1.14||-29%|
|Diluted adjusted earnings per common share||$||0.22||$||0.26||-15%||$||0.64||$||0.95||-33%|
|Cash from operations||$||23,133||$||18,944||22%||$||22,090||$||15,316||44%|
|* See "Non-IFRS measures" below|
- Revenues for the three months ended October 31, 2012, increased by 18% to $64.9 million, compared to $55.1 million in the same quarter last year. Revenues for the nine months ended October 31, 2012 ("Year-to-date") revenues also increased by 18% to $192.0 compared to $163.0 million. Both business segments reported higher revenues. Additionally, the Corporation realized incremental revenues from two rotary-wing operations acquired during the year.
- EBITDA for the quarter increased to $16.0 million, compared to $15.8 million in the same quarter last year. EBITDA margin of 25% was lower than the comparative EBITDA margin of 29%. Year-to-date EBITDA decreased by 5% to $48.1 million. Decreased margins were attributable to lower than expected utilization on new aircraft, higher fixed-wing costs, and higher infrastructure and administrative costs.
- Net profit for the current quarter was $1.2 million or $0.08 per share ($0.08 diluted) compared to $6.2 million or $0.42 per share ($0.31 diluted) for the same period last year. Year-to-date, net profit was $11.5 million or $0.79 per share ($0.63 diluted) compared to $21.6 or $1.52 per share ($1.23 diluted). Profit in the current quarter was impacted by a $3.7 million impairment loss ($2.7 million net of tax) realized on four aircraft and other non-aircraft assets. Year-to-date profit was impacted by a net gain of $2.4 million related to a number of non-operational transactions such as fair value adjustments of embedded derivatives and debt extinguishment and the $2.7 million after-tax impairment loss noted above. The profit in the comparative period reflects gains related to debt extinguishment and the fair value change on now-extinguished embedded derivatives of $1.1 million for the three month, and $5.3 million for the nine month periods ended October 31, 2011.
- Adjusted profit, which excludes the non-cash gains and losses noted above, was $4.0 million or $0.27 per share ($0.22 diluted) in the current quarter, compared to $5.1 million or $0.35 per share ($0.26 diluted) in the same quarter last year. Year-to-date adjusted profit was $11.8 million or 0.81 per share ($0.64 diluted), compared to $16.2 million or $1.14 per share ($0.95 diluted) in the comparative period.
Commenting on the financial results, Mr. Brian Semkowski, Interim President and Chief Executive Officer of Discovery Air stated, "We are pleased with the revenue growth in the quarter, especially from the incremental contribution from our recent helicopter acquisitions and MRO operation. Although EBITDA was consistent with a year earlier, we are not yet achieving the desired profit margins. As we've seen in the past few quarters, in our business, growth requires upfront investments before returns can be realized. This was evident in our higher expenses as a percentage of revenues due to increased operational costs to onboard and support additional fixed-wing aircraft, higher costs on higher rate aircraft, and changes in aircraft utilization due to changes in customer mix.
Our management team continues to look at opportunities to reduce cost and build efficiency. To date, we have identified approximately $1.5 million in vendor cost savings which should favourably impact our results for fiscal 2014. We are also addressing a number of ways to provide multiple services to our largest customers by leveraging service capability across Discovery Air and improve efficiency in our business practices. Other initiatives directed to achieving more profitable growth are underway."
A conference call with analysts and other interest parties to review results of the third quarter of fiscal 2013 will be held on Tuesday, December 11, 2012 at 10:00 a.m. (Eastern Time). The conference call may be attended by calling 1-888-231-8191. Please dial in 15 minutes prior to the call start time to secure a line. The conference call will be archived for replay approximately three hours following its conclusion on Discovery Air's website at www.discoveryair.com/investors.
Forward-looking information and statements are included in this earnings release. Please refer to the statement regarding forward-looking statements contained in the Corporation's Management's Discussion and Analysis for the year ended January 31, 2012 and the third quarter ended October 31, 2012, which are incorporated herein by reference. That statement provides an explanation as to what forward-looking statements are, and the specific factors, uncertainties and potential events that the Corporation has identified for the attention of readers. When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.
The Corporation's unaudited interim condensed consolidated financial statements and MD&A for the third quarter ended October 31, 2012, have been filed concurrently and are available on the Corporation's website at www.discoveryair.com and on SEDAR at www.sedar.com. The reader is encouraged to review the unaudited financial statements and MD&A for the quarter ended October 31, 2012 for more complete disclosure on the Corporation's financial condition and results of operations.
The Corporation's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB.A, respectively.
References to "EBITDA" are to net profit (loss) before finance costs, income taxes, depreciation of property and equipment and intangible assets, gains and losses on disposal of assets and extinguishment of debt, gains on acquisition, impairment losses, and gains and losses resulting from the change in fair value of financial liabilities. Beginning February 1, 2012, the Corporation changed the definition of EBITDA and EBITDAR to exclude gains and losses on disposal of property. EBITDA for prior periods is restated to reflect this change. The EBITDA margin is EBITDA as a percentage of revenue. Management believes EBITDA is an important measure as it excludes the effects of items which primarily reflect the impact of long-term investment decisions from the results of the Corporation's day-to-day operations. "Adjusted proft" is net profit (loss) attributable to shareholders of Discovery Air Inc. excluding non-cash gain on extinguishment of debt and gains and losses resulting from the change in fair value of financial liabilities and non-cash impairment loss, net of taxes. Management believes these measurements are useful in assessing the Corporation's ability to service debt and to meet other payment obligations, and as a basis for valuation.
SOURCE: Discovery Air Inc.For further information:
Sheila Venman, Investor Relations