Discovery Air Inc. announces results for its first quarter ended April 30, 2009



    LONDON, ON, June 15 /CNW/ - Discovery Air Inc. ("Discovery Air" or the
"Corporation") today announced its financial results for the quarter ended
April 30, 2009. The table below summarizes selected financial information for
the current and prior year quarters:

    
    ----------------------------------------------------------- -------------
                                                      3 months      3 months
                                                         ended         ended
    (thousands of dollars,                            April 30      April 30
     except per share amounts)                            2009          2008
    ----------------------------------------------------------- -------------
                                                    (unaudited)   (unaudited)
    Results of operations
      Revenue                                       $   25,566    $   30,754
      Operating expenses                            $   23,728    $   28,439
      --------------------------------------------------------- -------------
      Earnings before undernoted items              $    1,838    $    2,315

      Interest expense                              $    3,499    $    3,025
      Amortization                                  $    3,398    $    3,117
      Relocation of corporate office                $    1,173    $        -
      Financing transaction costs                   $      830    $        -
      Loss                                          $   (5,121)   $   (2,700)
      Loss per common share:
        Basic                                       $    (0.04)   $    (0.02)
        Diluted                                     $    (0.04)   $    (0.02)

    Financial position and liquidity
      Total assets                                  $  268,333    $  393,665
      Total long-term debt                          $  144,137    $  142,788
      Cash provided by operations                   $  (11,919)   $   (9,681)
      Working capital                               $   11,936    $  (13,156)

    Key non-GAAP performance measures(*)
      Adjusted loss                                 $   (4,293)   $   (2,700)
      EBITDAR                                       $    2,017    $    4,657
      Adjusted EBITDAR                              $    3,190    $    4,657
      EBITDA                                        $      665    $    2,315
      Adjusted EBITDA                               $    1,838    $    2,315

    (*) References to "EBITDA" are to net earnings (loss) before interest,
        financing transaction costs, income taxes, depreciation and
        amortization (except for amortization of rotable and overhauled
        components which are treated as operating expenses), goodwill and
        intangible asset impairment charge, and non-controlling interest.
        "EBITDAR" is EBITDA before aircraft lease cost. "Adjusted EBITDA" is
        EBITDA adjusted for relocation of corporate office charge. "Adjusted
        EBITDAR" is EBITDAR adjusted for relocation of corporate office
        charge. "Adjusted earnings (loss)" are net earnings (loss) adjusted
        for goodwill and intangible assets impairment charge, relocation of
        corporate office charge and related income taxes provision
        (recovery).

    Financial Highlights

    -   The negative impact of the global economic downturn and tight capital
        markets, which were noted in the third and fourth quarters of the
        previous year, continued into the first quarter of fiscal 2010.
    -   Consolidated revenues of $25.6 million in the current quarter were
        17% lower than the comparative period last year. This was largely
        attributable to a substantial year over year decline in the Northern
        Services segment's revenue. Partially offsetting the significant
        impact of lower revenues from the Northern Services segment were
        higher year over year revenues from the Corporation's Government
        Services segment. Due to the impact of the current economic downturn,
        revenue from the mining exploration and oil & gas sectors has reduced
        significantly as a percent of total revenues while revenue from
        Government sources has increased significantly.
    -   The Corporation reported an EBITDA of $0.7 million and a loss of
        $5.1 million in the first quarter representing a year over year
        decline of 71% and 90% respectively. While a significant portion of
        these declines corresponds with the decline in revenues, the current
        quarter EBITDA and earnings also reflect a non-recurring corporate
        office relocation charge of $1.2 million. Earnings for the current
        quarter were further affected by non-recurring financing costs of
        $0.8 million, most of which relate to establishing a new operating
        line of credit facility this quarter. The year over year decline in
        Adjusted EBITDA and Adjusted loss were not as dramatic at 21% and
        59%, respectively. The adjusted results exclude the impact of the
        corporate office relocation charge accrued in the most recent
        quarter. The increase in year over year Adjusted loss was more
        dramatic than the decline in Adjusted EBITDA as financing and
        amortization costs, including non-recurring finance transaction
        costs, were also higher year over year.
    -   The Corporation was able to successfully refinance a $33.0 million
        term loan that matured in February 2009 and also arranged a
        $15.0 million operating line of credit with a new lender, with
        availability for up to an additional $10.0 million during the
        Corporation's peak operating season subject to borrowing margins
        established by the lender.
    

    President and CEO's Comments

    While the effects of the economic slow down in the north continue to
dampen our revenues in the Northern Services segment, I am pleased with this
segment's ability to reposition their operations to address the current
economic realities of the north and ensure their operations are in alignment
with the revenue forecasted. The Corporation recognizes that reduced demand in
the north is likely to continue for some period of time, and the Northern
Services segment has been proactive in not only streamlining its current
operations, but also actively seeking to scale their operations to new market
places. The successful refinancing of our operating line of credit allows the
Corporation sufficient liquidity to properly scale these businesses and seek
new opportunities with our assets and expertise. The Corporation is placing
additional emphasis on working capital management which should also help
partially offset the reduction in mining and oil and gas related revenue. I am
also pleased to see strong organic growth from our Government Services
segment. We realized significant year-over-year revenue growth in this segment
as a result of bringing six additional Alpha jets into operation over the last
six months. Two more Alpha jets are to follow in the coming months making this
capital program a success. The strong organic growth in this segment partially
offset the reduced demand in the north and once again highlighted the strength
of the Corporation's diversity in revenue streams.

    The Corporation's interim financial statements and Management's
Discussion and Analysis for the quarter ended April 30, 2009 have been filed
concurrently and are available on Discovery Air's website at
www.discoveryair.com and on SEDAR at www.sedar.com. The reader is encouraged
to review the interim financial statements and Management's Discussion and
Analysis for more complete disclosure on Discovery Air's financial condition
and results of operations.

    Discovery Air's Class A common shares trade on the Toronto Stock Exchange
under the symbol DA.A.
    Discovery Air's Debentures trade on the Toronto Stock Exchange under the
symbol DA.DB.





For further information:

For further information: Wade MacBain, Director of Investor Relations,
Phone: (519) 951-3580, Toll-free: 866-903-3247, ext. 3580, E-mail:
wadem@discoveryair.com


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