Discovery Air Inc. Announces Results for the Quarter Ended April 30, 2015

TORONTO, June 12, 2015 /CNW/ - Discovery Air Inc. (the "Corporation") announced its financial and operating results for the quarter ended April 30, 2015.  The unaudited interim 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 April 30

(thousands of Canadian dollars, except per share amounts)

2015


2014


%
change









Revenue

$     42,415


$      41,083


3%


EBITDA*

$       2,421


$        (959)


352%


EBITDA Margin*

6%


-2%




Loss

$     (4,454)


$     (7,736)


-42%


Basic and diluted loss per share

$       (0.07)


$       (0.48)


-85%


Adjusted profit (loss) *

$     (5,354)


$     (7,748)


-31%


Basic and diluted adjusted profit (loss) per share *

$       (0.09)


$       (0.48)


-81%


Cash used by operations

$     (9,793)


$   (10,102)


-3%


Working Capital*

$      48,136


$      39,774


21%


*  See "Non-IFRS measures" below.

 

Financial Highlights

  • Consolidated revenues for the three months ended April 30, 2015 ("Current Quarter") increased 3%, in comparison to the three months ended April 30, 2014. The Aviation segment experienced increased activity (a 19% increase from the comparative period) primarily due to strong forest fire suppression operations in South America and airborne training in Germany.
  • EBITDA for the Current Quarter increased $3.4 million in comparison to the same period in the prior year, primarily due to increased flight hours and cost containment measures for the quarter.
  • Loss for the three months ended April 30, 2015 was $4.5 million compared to $7.7 million for the same period in the prior year. The variance was mainly attributable to increased flight hours and $1.0 million gain on disposal of equipment.

"The completion of the first quarter of Fiscal 2016 marks the second consecutive quarter of gradual improved financial results." reported Jacob (Koby) Shavit, the Corporation's President and Chief Executive Officer.

"The first quarter results give us confidence we are moving in the right direction.  With moderate increases in revenue coupled with the benefit of disciplined cost containment initiatives implemented in the prior year and ongoing this year, the Company's first quarter was positive.  The Corporation remains committed to strategic initiatives for long-term success in the Resources sectors and new focused initiatives while aggressively pursuing international growth in Contracted Airborne Training Services."

"As we enter our peak season Discovery Air will press forward with its growth initiatives while remaining vigilant in monitoring and reacting to changes in demand in an effort to continue on this a path of improved financial results."

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. Each aircraft was primarily financed by an 8 year secured term loan, totalling USD $11.9 million (CAD $15.1 million) from a related party of the aircraft vendor.
  • 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 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.
  • 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 May 26, 2015, the Corporation renewed the operating line of credit ("New Operating Line") to replace the Operating Line. The New Operating Line matures on June 30, 2017, and increases the borrowing limit to $30.0 million during the Corporation's peak season and $20.0 million outside of the peak season.

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 three months ended April 30, 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 unaudited interim consolidated financial statements and MD&A for the quarter ended April 30, 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 unaudited interim consolidated financial statements and MD&A for the quarter ended April 30, 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: PLEASE CONTACT: Sheila Venman, VP Human Resources & Communications, sheila.venman@discoveryair.com, 1-866-903-3247

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