Discovery Air Inc. Announces Results for the Quarter and Year Ended January 31, 2015

TORONTO, April 27, 2015 /CNW/ - Discovery Air Inc. (the "Corporation") announced its financial and operating results for the quarter and year ended January 31, 2015.  The audited consolidated 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 January 31


For the year ended January 31

(thousands of Canadian dollars, except per share amounts)


2015


2014


%

change


2015


2014


%

change
















Revenue

$

34,323

$

32,638


5%

$

190,779

$

213,526


-11%


EBITDA*

$

(8,186)

$

(9,464)


14%

$

16,047

$

24,758


-35%


EBITDA Margin*


-24%


-29%




8%


12%




Loss

$

(15,182)

$

(21,440)


-29%

$

(18,881)

$

(17,955)


5%


Basic and diluted loss per share

$

(0.44)

$

(1.34)


-67%

$

(0.63)

$

(1.12)


-44%


Adjusted profit (loss) *

$

(14,943)

$

(14,795)


1%

$

(18,650)

$

(12,403)


50%


Basic and diluted adjusted profit (loss) per share *

$

(0.43)

$

(0.92)


-53%

$

(0.62)

$

(0.77)


-19%
















Cash provided by operations

$

11,753

$

10,992


7%

$

5,150

$

17,879


-71%


Working Capital*

$

38,968

$

31,119


25%

$

38,968

$

31,119


25%

* See "Non-IFRS measures" below













Financial Highlights

  • Consolidated revenues for the three months ended January 31, 2015 ("Current Quarter") increased 5%, in comparison to the three months ended January 31, 2014. The Aviation segment experienced increased activity (an 8% increase from the comparative period) primarily as a result of forest fire suppression operations in South America.
  • Consolidated revenues for the year ended January 31, 2015 ("Year-to-date") decreased 11%, in comparison to the year ended January 31, 2014. The decline was largely attributable to decreased flight hours due to cyclical resourced-based activity in our commercial markets.
  • EBITDA loss for the Current Quarter decreased 14% in comparison to the same period in the prior year, primarily due to increased flight hours for the quarter. EBITDA for the twelve months ending January 31, 2015 declined by 35% in comparison to the same period in the prior year, primarily stemming from decreased flight hours.
  • Loss for the three months ended January 31, 2015 was $15.2 million compared to $21.4 million for the same period in the prior year. The variance was mainly attributable to increased flight hours, and a reduction of $8.1 million in impairment charges. For the year ended January 31, 2015, loss was $18.9 million compared to a loss of $18.0 million in the comparative period with the increase primarily resulting from an $8.7 million decline in EBITDA offset by reduced impairment charges of $9.1 million.

"The fourth quarter ended a challenging year with a better note" reported Jacob (Koby) Shavit, the Corporation's President and Chief Executive Officer.  "Discovery Air generated improved financial results for our fourth quarter which is traditionally our slowest period in the fiscal year, and made significant inroads with long-term strategic initiatives.  With a moderate increase in revenues, coupled with cost efficiency measures implemented as we adapted to existing market conditions, Discovery Air has positioned itself to capitalize on opportunities when market conditions improve." 

"The Company's vision remains very focused as we target long-term achievements in the Oil & Gas and Mining sectors while pursuing robust international growth opportunities with Contracted Airborne Training Services.  The current quarter realized a significant achievement for the Corporation with the commencement of these services in Europe/Germany."

Recent Developments

  • In January 2015, Air Tindi Ltd., a subsidiary of the Corporation, renewed a contract with the Stanton Health Authority in the Northwest Territories, to provide medevac equipped aircraft services for a period of eight years plus two option years. In April 2015, the Corporation purchased three King Air 250s for USD $13.3 million (approximately CAD $16.7 million) to support this contract. The purchase was primarily financed with a $15.0 million loan from the aircraft vendor with a term of eight years.
  • In April 2015, the Corporation renewed its fire services contract with the Ontario Ministry of Natural Resources and Forestry for a period of seven years.
  • On January 19, 2015, the Corporation announced its intent to complete a second rights offering ("Recent Offering") in order to raise up to $11.0 million of equity capital through the sale of Class A common voting shares and/or Class B common variable voting shares (collectively referred to as the "Shares"). Under the Recent Offering the Corporation distributed a total of 31,997,475 rights to its shareholders of record on February 10, 2015 entitling them to subscribe for up to an aggregate of 50.0 million shares at a price of $0.22 per Share.
  • The Recent Offering was completed on March 13, 2015. The Corporation raised $11.0 million in gross proceeds for the issuance of 50.0 million Shares. As a result of the Recent Offering the Unsecured Debentures conversion price changed to $5.07 per Share (formerly $6.53 per Share).
  • During January 2015 the Corporation commenced operations in Germany, providing the German Armed Forces airborne training services under a five year term contract awarded on January 30, 2014.

Forward-Looking Statements
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 MD&A for the year ended January 31, 2015, 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 audited consolidated financial statements and MD&A for the year ended January 31, 2015, 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 audited consolidated financial statements and MD&A for the year ended January 31, 2015 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.

Non-IFRS Measures
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 and disposals, impairment losses, and gains and losses resulting from the change in fair value of financial liabilities. The EBITDA margin is EBITDA as a percentage of revenue.  Management believes EBITDA to be an important metric in measuring the performance of the Corporation's day-to-day operations. This measurement is useful in assessing the Corporation's ability to service debt and to meet other payment obligations, and as a basis for valuation.  "Adjusted profit (loss)" is net profit (loss) attributable to shareholders of Discovery Air Inc. excluding non-recurring gain on extinguishment of debt, gains and losses on disposal of property and equipment, gains on acquisitions and disposals, and gains and losses resulting from the change in fair value of financial liabilities and impairment loss, net of taxes.  "Working Capital" is current assets less current liabilities excluding current portion of loans and borrowings and operating line of credit. 

SOURCE Discovery Air Inc.

For further information: Sheila Venman, sheila.venman@discoveryair.com, 1-866-903-3247

RELATED LINKS
www.discoveryair.com

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