Discovery Air Inc. announces results for its fourth quarter and year ended January 31, 2009

    TORONTO, May 1 /CNW/ - Discovery Air Inc. (Discovery Air or the
Corporation) today announced its financial results for the quarter and year
ended January 31, 2009. The table below summarizes selected financial
information for these periods.


                                for the quarter ended    for the year ended
    -------------------------------------------------  ----------------------

    (thousands of dollars,     January 31  January 31  January 31  January 31
    except per share amounts)     2009        2008        2009        2008
    -------------------------------------------------  ----------------------

    Results of operations
      Revenue                  $  19,590   $  20,161   $ 151,930   $ 123,554
      Operating expenses       $  23,578   $  24,345   $ 123,488   $  95,102
    -------------------------------------------------  ----------------------
      Earnings before
       undernoted items        $  (3,988)  $  (4,184)  $  28,442   $  28,452

      Financing costs          $   2,944   $   3,473   $  12,306   $  10,291
      Amortization             $   3,325   $   3,047   $  12,965   $   9,397
      Goodwill & intangible
       assets impairment
       charge                  $ 133,579   $       -   $ 133,579   $       -

      Net earnings (loss)      $(139,139)  $  (4,879)  $(130,325)  $   7,499
      Earnings (loss) per
       common share:
        Basic                  $   (1.03)  $   (0.04)  $   (0.96)  $    0.06
        Diluted                $   (1.03)  $   (0.04)  $   (0.96)  $    0.06

    Financial position
     and liquidity
      Total assets             $ 260,026   $ 376,899   $ 260,026   $ 376,899
      Total long-term debt     $ 145,726   $ 134,069   $ 145,726   $ 134,069
      Cash provided by
       operations              $   9,195   $   2,335   $  24,196   $  16,488

    Key non-GAAP
     performance measures(*)
      Adjusted earnings        $  (5,942)  $  (4,879)  $   2,872   $   7,499
      EBITDAR                  $  (3,049)  $  (2,434)  $  40,049   $  40,985
      EBITDA                   $  (3,988)  $  (4,184)  $  28,442   $  28,452
      After-tax operating
       cash flow               $  (1,178)  $  (1,953)  $  23,319   $  21,893
      After-tax operating
       cash flow per common
       share                   $   (0.01)  $   (0.01)  $    0.17   $    0.18

    (*) References to EBITDA are to net earnings (loss) before financing
        charges, 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. Reference to EBITDAR is EBITDA
        before aircraft lease cost. References to after-tax operating cash
        flow are to net earnings (loss) adjusted for amortization, future
        income tax and other non-cash charges but not adjusted for changes in
        non-cash operating working capital. References to adjusted earnings
        are net earnings (loss) adjusted for goodwill and intangible assets
        impairment charge and related income taxes provision (recovery).

    President and CEO's Comments

    The fiscal year ending January 31, 2009 was a success despite significant
global economic challenges. The Discovery Air team overcame significant
refinancing challenges in the face of possibly the worst and most unstable
credit markets we've seen in our lifetime. In light of current economic
conditions, stock market valuations, and the downturn in the resource market,
the Corporation decided to recognize a one-time, non-cash impairment charge to
goodwill and intangible assets. This non-cash impairment charge did not and
will not have any impact on our operations ability to generate revenues and
cash flow. After adjusting for this non-operational, non-cash charge,
Discovery Air still reported positive earnings and year over year improved
cash-flow from operations. These accomplishments are a testament to the
strength and resilience of our diverse operating units and the outstanding
capabilities of our people.

    Financial Highlights

    -   While the Corporation's Northern businesses experienced a reduction
        in flight activity and revenues year over year due to weakened demand
        brought on by the rapid deterioration in the economy and wet weather
        conditions that reduced demand for forest fire related aviation
        services, this loss in revenue was more than offset by the revenues
        generated by Top Aces, which was acquired in August of 2007, and
        Discovery Mining Services, which was acquired in January 2008.

    -   The year over year increase in operating expenses is higher in
        proportion to the increase in revenues due to weaker than expected
        market conditions related to the business of the Corporation's
        Northern Services segment. Infrastructure was put in place and costs
        were incurred in anticipation of strong market demand for services
        which did not materialize.

    -   The level of EBITDA was the same as the prior year and the level of
        after-tax cash flow increased over the prior year despite challenging
        business conditions in some of the Corporation's operations that led
        to reduced levels of business activity and revenues.

    -   Management's efforts to improve working capital management resulted
        in a positive position of $18.2 million at January 31, 2009 compared
        to a positive position of $16.2 million as at January 31, 2008 and a
        current ratio of 1.82 as at January 31, 2009 compared to 1.78 as at
        January 31, 2008.

    -   The Corporation booked a $133.6 million expense for goodwill and
        intangible assets impairment which resulted in a net loss for the
        year. The Corporation recorded profitable results for the year if the
        impact of the impairment charge is excluded. The goodwill and
        intangible assets impairment charge is a non-cash expense and does
        not impact the operating profits of the Corporation.

    CFO's Comments

    As previously reported, the Corporation has successfully completed a
refinancing of the $33.0 million term loan and negotiated a new operating line
of credit in very difficult credit markets. This financial restructuring,
which is now complete, was a major achievement and provides the Corporation
with the resources to both meet the challenges of this troubled economy and
seize opportunities in the coming year.
    The Corporation's audited financial statements, Management's Discussion
and Analysis, and Annual Information Form for the year ended January 31, 2009
have been filed concurrently and are available on Discovery Air's website at and on SEDAR at The reader is encouraged
to review the audited financial statements, Management's Discussion and
Analysis, and Annual Information Form 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:

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