Discovery Air Inc. announces results for the quarter ended July 31, 2016

TORONTO, Sept. 8, 2016 /CNW/ - Discovery Air Inc. (the "Corporation") announced its financial and operating results for the quarter ended July 31, 2016.  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 July 31


Six months ended July 31

(thousands of Canadian dollars, except per share amounts)

2016


2015


% change


2016


2015


% change














Results of continuing operations*













Revenue

$

53,938


$

58,883


-8%


$

96,183


$

97,672


-2%


EBITDA**

$

14,493


$

17,380


-17%


$

18,968


$

19,987


-5%


Income (loss)

$

2,003


$

732


174%


$

(1,966)


$

(3,144)


37%


Basic and diluted income (loss) per share

$

0.02


$

0.01


100%


$

(0.02)


$

(0.04)


50%


Cash provided by (used in) operations

$

4,269


$

10,332


-59%


$

(2,847)


$

331




Working Capital**

$

58,830


$

57,149


3%


$

58,830


$

57,149


3%














* The results have been presented to show continuing operations for all periods. This excludes discontinued operations of Discovery Air Technical Services Inc.

** See "Non-IFRS measures" below












 

Financial Highlights

  • Consolidated revenues for the three months ended July 31, 2016 ("Current Quarter") decreased 8%, in comparison to the three months ended July 31, 2015 ("Comparative Period") primarily due to decreased fire suppression activity across Canada. 

  • EBITDA for the Current Quarter decreased by $2.9 million in comparison to the same period in the prior year, primarily due to decreased revenue. Unusually wet summer weather in Canada has negatively impacted results in the Current Quarter.        

  • Income for the Current Quarter was $2.0 million compared to $0.7 million for the Comparative Period. The variance was mainly attributable to impairment losses in the Comparative Period, partially offset by reduced EBITDA in the Current Quarter.

  • Consolidated revenues for the six months ended July 31, 2016 ("Year-to-date") decreased 2%, in comparison to the six months ended July 31, 2015 ("Year-to-date Comparative Period") primarily due to decreased fire suppression activity, partially offset by increased airborne training services.

  • Year-to-date EBITDA decreased by $1.0 million in comparison to the same period in the prior year, primarily due to decreased revenue.      

  • Year-to-date loss was $2.0 million compared to $3.1 million for the Year-to-date Comparative Period. The variance was mainly attributable to impairment charges in the Comparative period, partially offset by decreased EBITDA in the Current Quarter.

"The second quarter revenues were lower than anticipated" reported Jacob (Koby) Shavit, the Corporation's President and Chief Executive Officer. "Damp summer conditions across Canada have resulted in lower revenues than the prior year.  Given our strong results in the first quarter, the impact of the second quarter on our year to date results, place us only slightly behind our performance a year ago. The Corporation will look to mitigate the impact of the quarterly results with a continued emphasis on cost containment measures, while remaining focused on specific growth opportunities."

Recent Developments

  • In June 2016, the DA Defence Standing Offers to provide Interim Contracted Airborne Training Services were extended until December 2017, with two additional six-month option periods.

  • On September 8, 2016, the Corporation entered into a definitive agreement with MAG Aerospace Corp., and certain of its subsidiaries and with certain Clairvest Group Inc. affiliates to sell 100% of its shares in Fire Services for $15.4 million (subject to certain post-closing purchase price adjustments and minority shareholder approval). The Corporation expects to finalize the transaction in November 2016.

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 quarter ended July 31, 2016, 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 July 31, 2016, 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 July 31, 2016 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. 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.  "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, VP Human Resources & Communications, sheila.venman@discoveryair.com, 1-866-903-3247

RELATED LINKS
www.discoveryair.com

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