MONTREAL, May 14 /CNW Telbec/ - Canadian Helicopters Income Fund (TSX: CHL.UN) ("the Fund"), the largest helicopter transportation services company operating in Canada, today announced its financial and operating results for the first quarter ended March 31, 2010.
The Fund generated revenue of $28.5 million, an increase of $2.0 million, or 7.5%, over revenue of $26.5 million in the first quarter of 2009. Visual Flight Rules (VFR) revenue increased $5.0 million primarily due to revenues from aircraft contracted in Afghanistan, partially offset by a 16.2% decline in domestic operations reflecting a weak resources market. Instrument Flight Rules (IFR) revenue decreased by 29.0% primarily resulting from the previously announced loss of the United States Transportation Command North Warning System operation and maintenance contract. Ancillary revenue, including the CFTS contract, grew $0.8 million due to increased DND flying training support. Revenue-flying hours decreased by 9.2% to 8,553 hours as a result of the substantial decline in resource-based activity in Canada.
EBITDA was ($1.4) million compared with ($2.5) million a year earlier. The improvement reflects a more favourable revenue mix, as well as slightly lower crew costs and selling, general and administrative expenses. Conversely, maintenance costs were higher than normal during the first quarter due to the preparation of aircraft sent to Afghanistan as part of the additional work awarded in March 2010. As a result of a lower income tax recovery rate in the first quarter of 2010, the net loss before non-controlling interest reached ($0.6 million), or ($0.05) per unit, compared with a net loss of ($0.5) million, or ($0.04) per unit, in the first quarter of 2009.
The Fund generated cash flows related to operating activities before net changes in non-cash working capital balances of $0.9 million, compared with ($1.3) million a year earlier. Reflecting stronger cash flows, distributable cash amounted to $0.9 million, or $0.07 per unit, compared with ($2.1) million, or ($0.16) per unit, last year.
Financial Highlights Quarters ended March 31,
(in thousands of dollars, except per unit data) 2010 2009
Revenue 28,493 26,479
EBITDA(1) (1,428) (2,490)
Net earnings (loss) before non-controlling
interest (587) (505)
Per unit - basic and diluted ($) (0.05) (0.04)
Distributable cash 851 (2,069)
Per unit - basic and diluted ($) 0.07 (0.16)
Weighted-average units outstanding (including
Class B) 13,068,700 13,098,700
(1) Earnings before interest, income taxes, depreciation and
amortization, gain or loss on disposal of property, plant and
equipment, share of net loss of a company subject to significant
influence and non-controlling interest
"Canadian Helicopters delivered solid first-quarter results despite customary seasonal factors and continued weakness in the domestic resource market," said Don Wall, President and Chief Executive Officer of Canadian Helicopters. "Our business model has repeatedly proven its resilience, as our diversified client base, long-term relationships, and significant share of revenue from essential services offer a significant protection against economic volatility. Moreover, the award, in March 2010, of additional work in Afghanistan illustrates our successful initiatives to leverage our asset base and competencies into new operations."
The Fund ended the quarter in a strong financial position with cash and cash equivalents of $30.7 million and unused debt facilities. As at March 31, 2010, the Fund had $15.0 million and $40.0 million available under its operating and term credit facilities, respectively, while combined cash and credit facilities amounted to $85.7 million.
Certain of the Fund's operations are subject to seasonal fluctuations due to variations in daylight hours and changes in weather conditions, with the highest demand generally occurring from May to October. While some operations are dependent on flight hours and are managed to mitigate the impact of seasonality, a significant portion of operating costs, including some crew and fleet costs, as well as selling, general and administrative expenses are fixed. Canadian Helicopters takes advantage of the off-season period to conduct repairs and maintenance on its helicopters and provide training to its crews in order to minimize downtime during the peak season. This strategy, necessitated by seasonality, significantly reduces profits during the quarters ending December 31 and March 31 and has historically resulted in losses. Therefore, results for any single quarter may not be indicative of the results that may be expected for the full year.
"We expect the ramp-up of our additional work in Afghanistan will counterbalance weakness in the domestic marketplace, as the pace of recovery indicates that activity in the natural resources sector will remain challenging in 2010. More importantly, Canadian Helicopters remains well positioned for an anticipated upturn in 2011. Meanwhile, Management will ensure the strong financial health of the Fund by maintaining our focus on streamlined operations and the continued growth of our ancillary activities. Given the strength of our balance sheet, we remain in a favourable position to aggressively pursue any profitable expansion opportunity that arises," concluded Mr. Wall.
Canadian Helicopters will hold a conference call to discuss these results on May 17, 2010 at 11:00 AM (ET). Interested parties can join the call by dialing 647-427-7450 (local) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-849-0833 (local) or 1-800-642-1687 (toll free) followed by access code 73236481 followed by #. This recording will be available until May 24, 2010.
ABOUT CANADIAN HELICOPTERS INCOME FUND
Through Canadian Helicopters Limited, Canadian Helicopters Income Fund is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. With over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates three flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.
This press release contains forward-looking statements relating to the future performance of the Fund. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made. The Fund disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise unless being required by applicable laws.
DEFINITION OF NON-GAAP MEASURES: EBITDA, STANDARDIZED DISTRIBUTABLE CASH AND DISTRIBUTABLE CASH
References to "EBITDA" are to earnings (loss) before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and non-controlling interest, as disclosed in the Summary of Selected Consolidated Financial Information.
Standardized Distributable Cash is a non-GAAP measure recommended by the Canadian Institute of Chartered Accountants ("CICA") in order to provide a consistent and comparable measurement of distributable cash across entities. Standardized Distributable Cash represents cash flows from operating activities, less adjustments for net maintenance capital expenditures as reported in accordance with GAAP.
Management views Distributable Cash as an operating performance measure, as it is a measure generally used by Canadian income funds as an indicator of financial performance. Distributable Cash is defined as Standardized Distributable Cash plus the net change in non-cash working capital balances and less the consideration paid by the Fund for the purchase of Units under the employee Unit purchase plan. Distributable Cash is important as it summarizes the funds available for distribution to Unitholders.
EBITDA, Standardized Distributable Cash and Distributable Cash are not earnings measures recognized under GAAP and do not have standardized meanings prescribed by GAAP. Therefore, EBITDA, Standardized Distributable Cash and Distributable Cash may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA, Standardized Distributable Cash and Distributable Cash should not be construed as an alternative to net earnings (loss) determined in accordance with GAAP as indicators of the Fund's performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.
Note to readers: Complete consolidated unaudited interim financial statements and Management's Discussion & Analysis of Operating Results and Financial Position are available on Canadian Helicopters' website at www.canadianhelicopters.com and on SEDAR at www.sedar.com.
SOURCE HNZ Group Inc.
For further information: For further information: Don Wall, President and Chief Executive Officer, Canadian Helicopters Income Fund, (780) 429-6919, (450) 452-3007