Improved financial performance over 2010
Consistent quarterly profitability since 2006
HALIFAX, Feb. 20, 2012 /CNW/ - Chorus Aviation Inc. ("Chorus") (TSX: CHR.B CHR.A CHR.DB) today announced its fourth quarter and year end 2011 earnings, with a
fourth quarter net income of $22.7 million or $0.18 per share, and
adjusted net income1 of $19.6 million or $0.16 per share.
Q4 2011 HIGHLIGHTS
Operating revenue of $407.7 million.
Free Cash Flow1 of $29.4 million, or $0.24 per share.
Operating income of $25.3 million.
Net income of $22.7 million, or $0.18 per share.
Adjusted net income1 of $19.6 million, or $0.16 per share.
YEAR END HIGHLIGHTS
Operating revenue of $1.7 billion.
Free Cash Flow1 of $106.8 million, or $0.87 per share.
Operating income of $102.0 million.
Net income of $68.1 million, or $0.55 per share.
Adjusted net income1 of $71.7 million, or $0.58 per share.
"I'm pleased once again to report strong operational and financial
results for both the last quarter and the year 2011," said Joseph
Randell, President and Chief Executive Officer, Chorus. "We experienced
a 22 percent increase in net earnings year-over-year due to increased
flying volumes and a decrease in our unit costs due to good cost
control. Looking back over the year, we completed our first full season
of the Thomas Cook Canada operation and had a seamless startup of the
second season. The best way to characterize 2011 is to say it was a
demonstration of our ability to execute on a growing and changing
"As always, safety was our priority and the dedication of our employees
resulted in a steady improvement in operational performance, including
the seamless transition of ten Q400s into the Jazz fleet," Mr. Randell
went on to say. "Looking ahead, we will complete the remaining five
deliveries on the Q400 fleet which we expect will have a future
positive impact on key financial metrics such as EBITDA and Free Cash
Flow while at the same time offer an improved product for passengers
and a lower unit cost for our customer."
Financial Performance -Fourth Quarter 2011 Compared to Fourth Quarter
Operating revenue increased from $392.7 million to $407.7 million,
representing an increase of $15.0 million or 3.8%. The increase in
operating revenue was primarily due to a $4.1 million or 2.7% increase
in pass-through costs from $154.3 million to $158.4 million, which
included $9.6 million related to fuel; offset by a decrease in airport
and navigational fees and deicing. Passenger revenue, excluding
pass-through costs, increased by $11.1 million or 4.7% primarily as a
result of a higher US dollar exchange rate, a $2.5 million increase in
incentives earned under the Capacity Purchase Agreement (CPA) with Air
Canada, and rate increases made pursuant to the CPA which includes two
additional Covered Aircraft added to the fleet; offset by a decrease in
Billable Block Hours. Other revenue decreased by $0.2 million.
Total operating expenses increased from $374.6 million to $382.4
million, an increase of $7.8 million or 2.1%. Controllable costs
increased by $3.7 million, or 1.7%, primarily as a result of costs
associated with capacity growth, including $0.8 million associated with
the introduction of the Q400 aircraft, consisting of crew salaries and
benefits, and training costs.
Salaries, wages and benefits increased by $9.4 million due to the
increased number of full time equivalent employees required to
facilitate capacity growth, wage and scale increases under new
collective agreements, increased pension expense resulting from a
revised actuarial valuation, and increased incentive compensation
Non-operating income amounted to $2.7 million, representing an increase
of $12.8 million. This change was mainly attributable to a foreign
exchange gain of $5.8 million (of which $3.1 million was related to an
unrealized foreign exchange gain on long-term debt and finance leases)
arising as a result of the change in value of the Canadian dollar
relative to the US dollar, the absence in this quarter of any loss on
derivative liabilities; offset by increased interest expense.
EBITDA1 was $38.0 million compared to $28.3 million in 2010, an increase of
$9.7 million or 34.3%. Free Cash Flow was $29.4 million, an increase
of $8.9 million or 43.4% from $20.5 million.
Operating income of $25.3 million for the three months ended December
31, 2011, was up $7.2 million or 40.1% over fourth quarter 2010 from
$18.1 million. Net income for the fourth quarter of 2011 was $22.7
million or $0.18 per share.
Chorus Aviation Inc.'s audited financial statements for the year ended
December 31, 2011, and accompanying Management's Discussion and
Analysis (MD&A) are available at www.chorusaviation.ca and at www.sedar.com. A copy may also be obtained on request by contacting Investor
Relations at: email@example.com or (902) 873-5094.
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:30 a.m. ET on Tuesday, February
21, 2012 to discuss the fourth quarter and year end results. The call
may be accessed by dialing 1-888-231-8191. The call will be
simultaneously audio webcast via: www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3814140 or in the Investor Relations section at www.chorusaviation.ca. This is a listen-in only audio webcast. Media Player or Real Player
is required to listen to the broadcast; please download well in advance
of the call.
The conference call webcast will be archived on Chorus's Investor
Relations website at www.chorusaviation.ca. A playback of the call can also be accessed until midnight ET,
February 28, 2012, by dialing (416) 849-0833 or toll-free 1-
855-859-2056, and passcode 43650221# (pound key).
1 Non-GAAP Financial Measures
EBITDA (earnings before interest, taxes, depreciation, amortization and
obsolescence) is a non-GAAP financial measure commonly used throughout
all industries to view operating results before interest expense,
interest income, depreciation and amortization, gains and losses on
property and equipment and other non-operating income and expenses.
Management believes EBITDA assists investors in comparing Chorus'
performance on a consistent basis without regard to depreciation and
amortization, which are non-cash in nature and can vary significantly
depending on accounting methods and non-operating factors such as
historical cost. EBITDA should not be used as an exclusive measure of
cash flow because it does not account for the impact on working capital
growth, capital expenditures, debt repayments and other sources and
uses of cash, which are disclosed in the statement of cash flows which
form part of the financial statements.
FREE CASH FLOW
Pre-conversion distributable cash was a key performance indicator used
by management to evaluate the ongoing performance of Jazz Air Income
Fund. Distributable cash is not a measure which is commonly utilized
in respect of a public corporation. Management believes, however, that
it is a term with which its shareholders are familiar and has provided
Free Cash Flow as a proxy for previously reported distributable
income. Free Cash Flow is calculated in the same manner as
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
Adjusted net income and adjusted earnings per share are calculated by
adjusting net income and basic earnings per share by the amount of any
unrealized foreign exchange gains and losses. During the fourth
quarter of 2011, Chorus recorded $3.1 million gain in unrealized
foreign exchange on long-term debt and finance leases. This adjustment
more clearly reflects earnings from an operating perspective.
Caution regarding forward-looking information
This news release should be read in conjunction with Chorus' audited
consolidated financial statements for the year ended December 31, 2011
and MD&A dated February 20, 2012, filed with Canadian Securities
regulatory authorities (available at www.sedar.com).
Certain statements in this news release may contain statements which are
forward-looking statements. These forward-looking statements are
identified by the use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan",
"predict", "project", "will", "would", and similar terms and phrases,
including references to assumptions. Such statements may involve but
are not limited to comments with respect to strategies, expectations,
planned operations or future actions.
Forward-looking statements relate to analyses and other information that
are based on forecasts of future results, estimates of amounts not yet
determinable and other uncertain events. Forward-looking statements, by
their nature, are based on assumptions, including those described
below, and are subject to important risks and uncertainties. Any
forecasts or forward-looking predictions or statements cannot be relied
upon due to, amongst other things, changing external events and general
uncertainties of the business. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements to differ materially from
those expressed in the forward-looking statements. Results indicated in
forward-looking statements may differ materially from actual results
for a number of reasons, including without limitation, risks relating
to Chorus' relationship with Air Canada or Thomas Cook Canada Inc.,
risks relating to the airline industry, energy prices, general
industry, market, credit, and economic conditions, competition,
insurance issues and costs, supply issues, war, terrorist attacks,
epidemic diseases, acts of God, changes in demand due to the seasonal
nature of the business, the ability to reduce operating costs and
employee counts, secure financing, employee relations, labour
negotiations or disputes, restructuring, pension issues, currency
exchange and interest rates, leverage and restructure covenants in
future indebtedness, dilution of Chorus shareholders, uncertainty of
dividend payments, managing growth, changes in laws, adverse regulatory
developments or proceedings, pending and future litigation and actions
by third parties. The forward-looking statements contained in this
discussion represent Chorus' expectations as of February 20, 2012, and
are subject to change after such date. However, Chorus disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required under applicable securities regulations.
About Chorus Aviation Inc.
Chorus Aviation Inc. ("Chorus") was incorporated on September 27, 2010
and is a dividend-paying holding company which owns Jazz Aviation LP,
Chorus Leasing I Inc. and Chorus Leasing II Inc. (the leasing companies
own the Q400 aircraft) and 7503695 Canada Inc. (which holds Chorus'
investment in Latin American Regional Aviation Holdings Corp., which in
turn holds a 75% indirect equity interest in South American regional
Chorus is traded on the Toronto Stock Exchange under the trading symbols
of CHR.A, CHR.B and CHR.DB.
About Jazz Aviation LP
Jazz Aviation LP has a strong history in Canadian aviation with its
roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation
Inc. and continues to generate some of the strongest operational and
financial results in the North American aviation industry.
There are three airline divisions operated by Jazz Aviation LP: Air
Canada Express, Thomas Cook Canada and Jazz.
Air Canada Express: Under a capacity purchase agreement with Air
Canada, Jazz provides service to and from lower-density markets as well
as higher-density markets at off-peak times throughout Canada and to
and from certain destinations in the United States. Jazz currently
operates scheduled passenger service on behalf of Air Canada with over
790 departures per weekday to 83 destinations in Canada and in the
United States with a fleet of Canadian-made Bombardier aircraft.
Thomas Cook Canada: Jazz operates Boeing 757-200 aircraft on behalf of
Thomas Cook Canada in the winter season to various destinations in the
Caribbean, Mexico and Central America from Canadian gateways.
Jazz: Under the Jazz brand, the airline offers charters throughout
North America with a dedicated fleet of five Bombardier aircraft for
corporate clients, governments, special interest groups and individuals
seeking more convenience. Jazz also has the ability to offer airline
operators services such as ground handling, dispatching, flight load
planning, training and consulting.
For more information, visit www.flyjazz.ca.
SOURCE CHORUS AVIATION INC.
For further information:
Debra Williams (519) 457-8071 London, Ontario firstname.lastname@example.org
Nathalie Megann (902) 873-5094 Halifax, Nova Scotia email@example.com